The Annual Percentage Rate Explained!
Your Annual Percentage Rate is your Interest Rate + the Closing Costs + Fees averaged together over the first year of the loan. That determines the annual cost of taking out your mortgage.
Let’s talk about the fees that can be included in your APR. Origination fees, prepaid interests, underwriting fees, document prep fees, settlement fees, a few other 3rd party fees, and private mortgage insurance if you have it. All this to say that your APR will typically be higher than your interest rate. You receive an APR quote no more than 3 business days after you complete your loan application. Another thing to keep in mind with your APR, it can fluctuate in between your initial rate lock and the official closing of your loan. This is due to potential 3rd party fee fluctuations or market changes that can occur during that time frame. However, once your fixed rate loan is closed, your APR will not change. Keep in mind your Interest rate is the actual rate you are paying on the loan balance.
Chat with The Hunter Home Loan Team Today!
For more details on how to prepare and what to expect at your first meeting with a mortgage professional or if you are interested in getting started on your loan approval process, please contact our Hunter Home Loan Team at 727-315-1635.
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