August 16th, 2017 5:07 AM by Jackie A. Graves, President
Answer: The difference between a
mortgage interest rate and an annual percentage rate is that a mortgage
interest rate is the cost you pay each year to borrow money for a mortgage. An
annual percentage rate reflects the mortgage interest rate and other charges.
There are many costs
associated with taking out a mortgage. These include:
The interest rate
The interest rate is the cost you will pay each year to borrow the
money, expressed as a percentage rate. It does not reflect fees or any other
charges you may have to pay for the loan.
An annual percentage rate (APR) is a broader measure of the cost to
you of borrowing money. The APR reflects not only the interest rate but also
the points, mortgage broker fees, and other charges that you have to pay to get
the loan. For that reason, your APR is usually higher than your interest rate.
Take care when comparing the APRs of
adjustable-rate loans. For adjustable rate
loans, the APR does not reflect the maximum interest rate of the loan. Be
careful when comparing the APRs of fixed-rate loans with adjustable-rate loans,
or among different adjustable-rate loans. Don’t look at the APR alone in
determining what loan makes the most sense for your circumstances.
If you're shopping for a
mortgage, learn how new mortgage
rules may help you shop. If you already have a mortgage, use this checklist
to see what steps you can take to make the most out of your mortgage.
If you have a problem
with your mortgage closing process, you should discuss the issue or matter with
your lender. If you’re having issues with your mortgage, you can also submit a
complaint to the CFPB online or by
calling (855) 411-CFPB (2372). We’ll forward your complaint to the company and
work to get you a response. You may also wish to get your own attorney to take
a look at your issue or matter.
Courtesy of the Consumer Financial
Protection Bureau - To view the original article click here