I went to one lender’s website and ran a hypothetical mortgage calculation, and the rate they gave me was 5% but the APR was 6.2%. Then I went to another lender’s website and ran the same exact hypothetical and was given a rate of 4.875% and the APR was 4.935%.
Why is the difference between the interest rate and APR with Lender #1 so much broader than the difference between the interest rate and APR of Lender #2?
The first one is hiding the closing cost in the rate and the second one will have closing cost on the loan
The APR is the rate on the beneficial amount of the loan. No Closing cost then the APR is the same as the nominal rate of say 4.875%. That just will never happen as there are cost in every loan.
I am a mortgage banker in TN
The first one is hiding the closing cost in the rate and the second one will have closing cost on the loan
The APR is the rate on the beneficial amount of the loan. No Closing cost then the APR is the same as the nominal rate of say 4.875%. That just will never happen as there are cost in every loan.
I am a mortgage banker in TN
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