Both interest rates and also APR are 2 frequently used terms that will refer to almost similar concepts but they have some differences while making the actual calculation. While evaluating the actual loan cost, it is essential to understand properly their differences as APR may include a few additional costs too.
While applying for the best Mortgage Greensboro, it is necessary to consult with any of the Mortgage Expert like Jill Burgess, who will calculate both the interest rate and APR of any loan and suggest you the right mortgage that is appropriate for your condition.
When we talk about interest rate then we refer to the loan cost that a borrower has to bear annually and that usually expressed in terms of percentage.
While APR refers to the yearly cost for the same loan to the same borrower, where it will be inclusive of all the associated fees that also you need to pay while borrowing your loan. Similar to an interest rate, even the APR too will be expressed in terms of percentage.
However, unlike a rate of interest, it will also include all other necessary fees and charges e.g. mortgage insurance, discount points, most closing costs, and also loan origination fees, etc.
It is therefore important to keep in your mind that there are many different kinds of APR. Hence, you must always verify before you sign on the papers. Typically, loans are offered either with a fixed or variable rate.
Any fixed APR will mean that your rate of interest will never change for the whole term of the loan. While in variable APR, the interest rate can often fluctuate. Both such loan types have pros and cons however it is very important to know that any variable APR will follow the interest rate as dictated by the market.