When searching for a mortgage, many homeowners might wonder: “What is APR?” Mortgage loans have interest rates, but also other costs - this is where the annual percentage rate (APR) comes into play.
But what exactly does APR mean, and why does it matter for mortgages? Here is a basic guide to help you understand this crucial aspect of a loan estimate:
APR, or annual percentage rate, represents the amount of interest you’ll pay on a loan yearly. It’s a term you’re likely to encounter in the financial world, as credit card companies and lenders are required to include APR in their advertisements.
With mortgages, the advertised APR may be different from the mortgage interest rate. This is because the APR includes other factors like lender fees, closing costs, mortgage points and private mortgage insurance along with the regular interest rate.
One simple way to compare APR and mortgage interest rates is to consider APR to be the “overall cost” of borrowing money for your home. While your mortgage rate directly affects your monthly mortgage payments, the APR reflects the total annual cost of the mortgage.
For this reason, many experts recommend comparing APR when shopping for a loan. The Truth in Lending Act (TILA) requires both lenders and credit card companies to disclose the APR up front, which makes it simpler to compare. However, it’s important to check with each individual lender to find out which fees are included in their advertised APR.
Mortgage APR is important to understand along with the myriad other financial terms in the real estate world. The more you know about what goes into your potential loan payments, the better decision you can make on a mortgage.
I am a real estate broker, property manager, and investor, located in Ann Arbor, Michigan. To each client, I bring close to a decade of experience in real estate, first as a real estate investor, then manager, and now love to share my experience and knowledge with property buyers and sellers as a real estate broker. Since attending the University of Michigan in 2005, I have lived in Ann Arbor ever since. My exceptional knowledge of the market as an investor and property manager provides a unique perspective and competitive advantage to my clients for selling and buying both residential and investment properties.
I have successfully managed investment properties in Ypsilanti and Kalamazoo and have conducted real estate transactions throughout southeast Michigan. Whether clients are looking for their first home, vacation homes, or the home of their dreams, I will be able to stay on top of the process, remove obstacles and make the real estate deals as pleasurable as possible. I enjoy working with people and finding ways to share a laugh or two in the process. I take pride in being available to my clients and being responsive to their needs.
In addition to my residential property expertise, and my multicultural background, I am capable of working with international investors and home buyers to make their international property purchases smoother and trouble-free. If you are interested in the acquisition of investment homes for your children while they attend the University of Michigan, as a property manager, investor, and broker, I will be able to help you make that reality come true.
I graduated from the University of Michigan and own and operate several businesses in Ann Arbor and Ypsilanti. In addition to my real estate experience, I am also a technology enthusiast and am always on the hunt to use technology and media to enhance the buying and selling experience.
If you are looking to make your first home purchase, or are trying to sell your home, give me a call and I can guide you through the services that I can offer you to help you start along the journey. I take great pride in my work and it would be an honor for me to represent you and your needs.
Yours truly, Vincent Zhang