What is the annual percentage rate?
The Annual Percentage Rate, or A.P.R., is the cost of y our credit expressed in terms of an annual rate. Because you may be paying “points” and other closing costs, the A.P.R. disclosed is after higher than the interest rate on your loan, may be paying “points” and other closing costs, the A.P.R. disclosed is after, higher than the interest rate on your loan. The A.P.R. can be compared to other loans for which you may have applied and give you a fair method of comparing price.
The annual percentage rate (APR) is the cost of your mortgage expressed as an annual rate. Because you may be paying points and other “Prepaid” finance charges at closing, the APR disclosed is often higher than the interest rate on your loan. This APR can be compared to the APR on other loan programs to give consumers a consistent means of comparing rates and programs.
