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: 197 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 NeckerProudly Presents1406 Valbrook Court SBel Air MD 21015H
"Alex Necker came highly recommended to us and we are delighted to write a review of his performance as our realtor.
We wholeheartedly recommend Alex to anyone seeking to buy or sell a home. With his eagerness to please and stellar competence, he made what could have been a trial (buying a home) a breeze for us. We found his demeanor most engaging. He was always cordial and personable toward us. His work ethic, diligence and promptness of service impressed us beyond measure. He treated us as though we were his only clients. His attention toward us was more that of a family member than a realtor to client. We truly felt he was our advocate, not merely serving as simply our realtor. He insisted we were aware of possible flaws with the home we ultimately decided to buy and we found his honesty refreshing. After all, no house is ever going to be perfect. He thoroughly enjoys his work and this is personified in his attentiveness and enthusiasm. Do not even consider engaging the services of any other realtor. After working with Alex, we no longer consider him as simply a realtor who made buying our new home a snap, we consider him a friend for life!"