What is the difference between the INTEREST RATE and the A.P.R. ?

You'll see an interest rate and an Annual Percentage Rate (A.P.R.) for each mortgage loan you see advertised. The easy answer to "why" is that federal law requires the lender to tell you both.

The A.P.R. is a tool for comparing different loans, which will include different interest rates but also different points and other terms. The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.

While it's designed to make it easier to compare loans, it's sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since the federal law that requires lenders to disclose the A.P.R. does not clearly define what goes into the calculation, A.P.R.s can vary from lender to lender and loan to loan.

The A.P.R. on a loan tied to a market index, like a 5/1 ARM, assumes the market index will never change. But ARMs were invented because the market index changes and makes fixed rate loans cheaper or more expensive to make -- that's why they're variable rate in the first placed!

So, A.P.R.s are at best inexact. The lesson is, that A.P.R. can be a guide, but you need a mortgage professional to help you find the truly best loan for you.

Note when you're browsing for loan terms that the A.P.R. will not tell you about balloon payments or prepayment penalties, or how long your rate is locked. Also, you'll see that A.P.R.s on 15-year loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time.

Let us help you get the “best” rate for you. What does that mean? Not all mortgage rates are created equal. There are fixed rates, adjustable rates, introductory “teaser” rates and all kinds of fine print that go along with each of them. We clear away the confusion and show you the rates and loan programs that you will like best. You can be certain that we will answer all of your questions so you can be confident that you have the best rate to fit your personal needs.

Our experience and vast network of lenders assures you that we can find a rate and loan program to fit your personal situation. We also want to make sure that you are an educated consumer. Don’t be fooled by low advertised rates that suck you in only to find out too late in the process that your rate will be higher. Other things to watch out for are hidden fees associated with those “teaser” rates that make those attractive rates not so attractive after all. Let us be your guide so that you can be assured that you have the best rate after all the costs are taken into account. Please give us a call so we can make your dream rate a reality.