Mortgage Interest Rates vs APR for Phillips Ranch Real Estate Buyers
One of the most confusing issues for Phillips Ranch home buyers is the difference between the interest rate they were quoted when they applied for a loan, and the APR (annual percentage rate) that is shown on the Truth in Lending form or the Good Faith Estimate, which is disclosed to the buyer before the loan is actually funded.
I have had many customers who, in the last stages of buying their home in Phillips Ranch, call to complain that the lender quoted them 5.25%, but the APR on their disclosures is 5.625%. What is going on, they want to know. Is the loan officer pulling a fast one?
The answer is no, the loan officer is not lining his pockets at the last minute because he thinks you will not pull out of the Phillips Ranch real estate purchase. The APR is a figure which is required to be disclosed by
government standards. It includes other fees which a buyer has to pay in order to get the loan. These fees include mortgage origination fees, points to buy down the interest rate, and loan processing fees. Altogether, they are known as up-front fees. The higher the up-front fees, the higher the APR.
government standards. It includes other fees which a buyer has to pay in order to get the loan. These fees include mortgage origination fees, points to buy down the interest rate, and loan processing fees. Altogether, they are known as up-front fees. The higher the up-front fees, the higher the APR.So when you see that the APR on your Good Faith Estimate is higher than the interest rate you were quoted, keep in mind that the APR includes not only the interest rate, but other fees as well. That is why it is higher. You are still getting the same rate you were quoted.
For more information about the Phillips Ranch Real Estate Market, including current Phillips Ranch Homes for Sale, Phillips Ranch Foreclosures, and more, please visit the Phillips Ranch real estate information website at Phillips Ranch Real Estate. And you can always contact me, Brett Ehart, with any of your real estate or mortgage questions. Call (909) 868-1955, or email Brett@bkEstates.com.
