1. The interest rate only includes the interest percentage you will be charged for borrowing the money, and it does not include any other fees you might be required to pay on the loan.
An annual percentage rate (APR) reflects the mortgage interest rate plus other charges.
2. Unlike an interest rate, Apr includes other charges or fees such as mortgage insurance, most closing costs, discount points and loan origination fees.
3. Many times to a consumer, the annual percentage rate is a better assessment of the transaction and the deal they are getting.
4. The APR should always be greater than or equal to the nominal interest rate.
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