Mortgage Loan Rate and APR. The Mortgage Loan Rate is simply the amount of interest directly charged on the loan with no other costs such as fees, etc. to be included in the cost of transaction.
The Annual Percentage Rate is a much more detailed than mortgage loan rate. The Annual Percentage Rate was introduced so that customers could easily compare rates from different lenders in the market, which makes it not suitable to evaluate the loans vendors. Annual Percentage Rate figures are used by financial institutions such as banks, lending firms, etc., to market their interest rates.
How to compare
You should first consider the mortgage loan rate, then ask for the bank to itemize the upfront costs. Compare each on a line by line basis, rate compared to rate, closing costs to closing costs. This is the only true way to compare two mortgages. Unfortunately for the consumer, we are led to believe that the APR is standard which could not be farther from the truth.
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Loan Guru's is a provided for informational purposes only, and is not intended for trading, investing mortgage basis. See your local financial institution such as banks to learn more about details before securing a mortgage.
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