The APR (Annual Percentage Rate) is the percentage cost of the credit for which you are obtaining on a yearly basis. The APR was designed by the federal government to reveal the true total cost of getting a loan. The APR includes the interest rate and other added costs such as points, origination fees, and mortgage insurance (if applicable). The APR was created so that you can compare credit costs. Please keep in mind that the APR is not the same as the note rate. The note rate is the rate with which your monthly mortgage payments are calculated. The APR will always be higher than the note rate because it includes other closing costs required by the lender/broker.When looking at a Good Faith Estimate(GFE), items that are used to calculate the APR should be checked in the PFC (Paid Finance Charge) Box to the far right side of the Good Faith Estimate(GFE). |
