Annual Percentage Rate Explained

The Annual Percentage Rate, which must be reported by lenders under Truth in Lending regulations, is a comprehensive measure of credit cost to the borrower that takes account of the interest rate, points, and flat dollar charges.

The Annual Percentage Rate is also adjusted for the time value of money, so that dollars paid by the borrower up-front carry a heavier weight than dollars paid ten years down the road. However, the APR is calculated on the assumption that the loan runs to term, and is therefore potentially deceptive for borrowers with short time horizons.

"Ask Us To Explain Your Annual Percentage Rate"

MORGAGE GLOSSARY

Amortization | Amortization Schedule | Annual Percentage Rate - APR | Biweekly Mortgage | Bridge Loan | Cash Out | Conforming Mortgage | Conventional Morgage | Debt To Income Ratio | Direct Lender | Discount Mortgage Broker | Discount Points | Good Faith Estimate | Grace Period | Impounds | Interest Only | Jumbo Morgage | Loan To Value | LTV | Negative Amortization | No Ratio | Option Arm | Piggyback | PITI | PMI | Prepayment Penalty | Reverse Mortgage | Subprime | Truth in Lending | Wholesale Lender | Yield Spread Premium | YSP