What is APR?

San Diego Mortgage APRSan Diego Mortgage | Annual Percentage Rate

The Annual Percentage Rate (APR) can be a great tool for determining which offer from different Lenders will financially benefit You the most.  However, it’s critical to make sure each Lending Offer You receive via the Truth in Lending Disclosure, uses the same set of values for items such as Title Insurance, Escrow payments, down payment amount, real estate taxes, etc.  Otherwise, the numbers will be inaccurate and the use of APR as a system to find the Best loan will totally back-fire.

There are 2 different kinds of “APR”.  There is Nominal APR and Effective APR.  When looking at a San Diego Mortgage, we’re talking about Effective APR.

Nominal APR – The simple-interest rate on a particular Loan for a Year.  This is calculated as the rate, for a given a repayment period times the number of payments in a year.

Effective APR – This definition will vary across many different fields and formats.  However, the basic definition is the “effective interest rate” when factoring in the totality of the circumstances involved with acquiring a Loan.  Typically, loan fees, interest rates, down payments, etc. will all be used to determine an Effective APR.  This is usually what is done when You apply for a San Diego Mortgage.

San Diego Mortgage APR

I know this is a tough one, so please reach out if You have questions.  I’m here to help and it’s Free.

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