What is APR and how does it differ from mortgage interest rate?

APR (annual percentage rate) is the cost of financing expressed in percentage terms. The interest rate tells you the annual cost (interest) that you’ll pay to borrow the money (principal) and also any charges associated with acquiring the loan, including points, lender fees, escrow fees, etc. APR is a useful tool when comparing loans; it’s important to know, however, that APR spreads the costs over the life of the loan, so if you don’t plan on keeping the loan for the entirety of its term, the APR can be misleading.

Manuel Tobias  //  Tobias Mortgage Company  //  110 Gateway Drive, Suite 130, Lincoln  //  916-949-9637