One of our Mortgage Consultants can provide you with a Good Faith Estimate that will accurately estimate the amount of closing costs for your specific loan. What is the difference between my Annual Percentage Rate (APR) and Interest Rate?
Your Interest Rate, sometimes referred to as the Note Rate, is the actual rate used to calculate your monthly payments. The Annual Percentage Rate (referred to as the “APR”) encompasses both your interest and any additional costs or prepaid finance charges you may pay, such as prepaid interest (necessary to adjust your first payment if you close mid-month), private mortgage insurance, closing fees, points, etc. Your APR represents the total cost of credit on a yearly basis after all charges are taken into consideration. It will usually be slightly higher than your Interest Rate because it includes these additional items and assumes you will keep the loan to maturity. How much money do I need to bring to closing? How much you need to bring to your closing will depend on your specific situation. Generally, you only need to bring money to the closing if you’re purchasing a new home. The money needed is used to pay for down payment, closing costs and prepaid items such as escrow accounts.
Related Questions
- One of our Mortgage Consultants can provide you with a Good Faith Estimate that will accurately estimate the amount of closing costs for your specific loan. What is the difference between my Annual Percentage Rate (APR) and Interest Rate?
- What should I do if my closing costs reflected on the settlement statement are higher than the costs that were reflected on the good faith estimate I received?
- What is the difference between Initial and Annual percentage rate on a good faith estimate?
