Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What is the difference between APR and the interest rate I am being quoted?

April 26, 2017Apr Interest rate quoted

0

Posted

What is the difference between APR and the interest rate I am being quoted?

1 Answer

0

Posted

The interest rate you are quoted is your note rate. This is the rate at which you accrue (annually) interest on the unpaid principal balance. The APR (Annual Percentage Rate) is the cost of your mortgage including the points, lender fees, prepaid interest and certain title fees on your loan. These PFC (Prepaid Finance Charges) are then deducted from your loan amount. The loan is the re-amortized to obtain the APR, which will always be higher than the note rate, unless there are no lender fees.