Answer to the question “What is the difference between APR and Interest Rate?”

Someone asked this question for the 20th time, and then deleted their question, but since I wrote out the answer, I’m leaving it for everyone.

The interest rate is only the interest that you will pay on the mortgage. Mortgage interest rates are often quoted in .125% increments.

The APR is a calculation designed to more easily compare mortgage offers. It includes the interest rate above, PLUS other fees and costs such as: lender fees, origination fees, discount points, and some closing costs. Some banks and lenders will change what they call certain fees to avoid having to include them in the APR calculation, making it even harder to compare. An APR is required anytime a bank or lender advertises an interest rate, to help get a more accurate comparison. The interest rate and the APR should never be exactly the same unless there are no fees on the loan.

submitted by /u/The_Void_calls_me
[link] [comments]

Someone asked this question for the 20th time, and then deleted their question, but since I wrote out the answer, I’m leaving it for everyone. The interest rate is only the interest that you will pay on the mortgage. Mortgage interest rates are often quoted in .125% increments. The APR is a calculation designed to more easily compare mortgage offers. It includes the interest rate above, PLUS other fees and costs such as: lender fees, origination fees, discount points, and some closing costs. Some banks and lenders will change what they call certain fees to avoid having to include them in the APR calculation, making it even harder to compare. An APR is required anytime a bank or lender advertises an interest rate, to help get a more accurate comparison. The interest rate and the APR should never be exactly the same unless there are no fees on the loan. submitted by /u/The_Void_calls_me [link] [comments]

<a href="Read More“>View Full Article

Need More Commercial Real Estate Leads?SAVE 40% this month!

Our commercial valuation calculator was created to evaluate commercial real estate. In 6 quick steps you will know your NOI, CAP RATE, and IRR.

Now you can get your own branded version of our calculator!

Generated by Feedzy