What is the difference between Initial and Annual percentage rate on a good faith estimate?
The Annual Percentage Rate (APR) is the cost of your credit expressed as an annual rate. Because you may be paying loan discount ‘points’ and other ‘prepaid’ finance charges at closing, the APR disclosed is often higher than the interest rate on your loan. This APR is designed to be compared to the APR on other loan programs to give you a means of comparing rates and programs. I’ll further add that APR can easily be manipulated and often is, so it is not the best means of comparing like loan programs. Always look at the rate and the total fees and use simple math and common sense.
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?
- Does a pre-approval with a good faith estimate mean you are defintely approved for a mortgage?
- What is the difference between Initial and Annual percentage rate on a good faith estimate?
