What does APR stand for? That’s easy, Annual Percentage Rate
Then, what does it mean? That’s where things get complicated. By definition, it is the cost of the loan spread over the term of the loan expressed as a rate. In theory, the borrower should be able to compare the APR from Lender A with Lender B to determine which loan is cheaper. Simple right?
All APR calculations include both the Interest Rate and Closing Costs. Which closing costs that are included may vary from lender to lender. So, figuring it out yourself is the best thing to do. It will require a few numbers from the closing cost worksheet that the lender should have provided you, some simple math and this handy calculator to help you the more complicated formulas.
You will add up the fees associated with securing the financing and enter them as closing costs in the calculator for the loans and lenders that you are comparing. This will give you an APR that will provide a truer picture of long-term cost of your loan.
A word of caution - You cannot compare loans with differing term lengths.
If your main goal is to have the lowest monthly payment, then a lower APR may not matter as much. The interest rate is going to be the main consideration in selecting a loan.
If you are thinking long term, the loan with the lower APR is going to cost you less in the long run.
When considering the long term costs of the loan, keep in mind the average mortgage is only held seven years.
If you, a friend, or family member is considering buying or selling a home, we would love to meet them.
And until next time, remember…
BE A NICE HUMAN
Author:Alexander Necker Phone: 410-920-4760 Dated: September 27th 2018 Views: 249 About Alexander: ...
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About Alexander Necker, Real Estate Sales Consultant
I specialize in selling the Baltimore Metropolitan’s Premier Homes.
I am an Eagle Scout. I mention this because the process of becoming an Eagle Scout provided me with the foundation by which I live my life. The values of trustworthiness, integrity, and helpfulness have allowed me to become the man I am today.
The words that describe me are:
Driver of my own professional destiny
C onduit for connecting people for professional development
Devoted husband with a wonderful wife
Father to 2 beautiful children with growing college funds
Student of Finance and Investments
After graduating college and starting a career in my field of study (agronomy), I quickly rose to the position of assistant and then superintendent of private golf courses. After 17 years in the golf business, I decided it was time to change to a career where I would not be at the mercy of the uncontrollable forces of sun, wind and rain. I chose a field where I would be the master of my fate, where the hard work and the long hours to which I am accustomed would be the determinant of my success.
The primary reason I am in the real estate business is to help people. A real estate transaction is one of the largest financial transactions you will ever undertake. Everyone deserves a real estate partner that understands and appreciates that fact. My focus on integrity, trust and communication are nothing less than I would want for myself, my family or friends entering into a large financial proceeding. I am committed to being the one real estate agent that keeps my client's best interests front and center.
In real estate, I consider myself to be a true professional in the same vein as the physician, the attorney and the accountant whom you must trust with the most important assets of your life. Nothing less is acceptable.
Alexander Necker Proudly Presents9605 Haven Farm Road, Unit
"When my cousin recommends someone to me, I know I can trust them. This is why I had no hesitation when he put me in contact with Alex Necker. As a 23 year old and a first time home buyer, I knew very little coming into this process — my main source of information had been HGTV. Due to personal circumstances, I didn't have much outside support, so I really leaned on Alex for help. He took baby steps with me when I needed it, but he also empowered me to make important decisions on my own. As cliché as it is, I truly felt like I was Alex's only client. He was always available to me and went above and beyond what I asked of him.
One of the best examples of this happened about half way through my search. There was a condo that I had dismissed because of the street that it was on. Shortly after I marked it as trash, Alex called me and told me that he thought it could be a good fit for me. Though I was still skeptical, I decided to trust him, and we went to see it. It turns out that I had misread the street name. Although the seller and I couldn't reach an agreement, I put an offer in on a property that I never would have looked at had Alex not been so diligent.
I highly recommend Alex to anyone looking to buy a home. He is proactive and knowledgeable, and he tailors his approach for each of his clients. He stuck with me for months, through market slumps and bid wars, and never once did I doubt his skill and dedication. Any realtor could have found me a property, but Alex helped me find a home.