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What is APR

One of the most common questions for borrowers is why is my APR higher than my interest rate and what does it mean?  The APR was created by the government to help consumers shop for financing.  It is not the rate that your monthly payments are calculated by, but it does reflect what it cost you to get a certain rate.  For example, if you come to Interstate and get a 5% mortgage with $3000 in total closing costs, you would have a lower APR than if you took a mortgage from one of our competitors that was charging $4000 for the same rate.  The APR is a great tool for the borrower to see what rates are costing from various lenders.  Keep in mind if a mortgage is requiring mortgage insurance that will reflect in a higher APR.  Here are some fees that do not get factored in the APR:

- Doc Preparation, State or Local Recording Fees, Certain Endorsements, Taxes and Insurance

Make sure your lender is showing the proper fees on the Good Faith are being computed towards APR.  All fees in the 800 section of your Good Faith should effect APR except appraisal & credit reports.  When used properly this is a valuable tool for consumers to shop mortgages. 

If you feel your lender is not disclosing properly and would like us to confirm your APR for free, please give us a call today. 

APR Hotline: (866)-495-4125

 

Interstate Mortgage Service, Inc. NMLS #89235
25062 South 190th Street, Queen Creek, AZ  85142
Office:  (480) 553-5555
ryan@interstatemortgage.net
Copyright © 2017 Interstate Mortgage Service, Inc. NMLS#: 37053. Go to www.nmlsconsumeraccess.org to verify licensing.

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