A federal law that requires a lender to give borrowers the annual percentage rate (APR).
The APR helps borrowers compare one loan to another since it factors in not only the interest rate but also all the fees and closing costs that you need to pay. APR, though, is not always the best measure of comparison since not all the lenders include the same fees and closing costs. The Truth-in-Lending act is also called Regulation Z.
See: APR
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Showing posts with label annual percentage rate. Show all posts
Showing posts with label annual percentage rate. Show all posts
Monday, March 26, 2007
Friday, April 14, 2006
Annual Percentage Rate (APR)
A measurement used to compare different loans offered by competing lenders, which takes into account both the interest rate and closing fees
Unlike an interest rate, an APR gives you a bigger picture when shopping for the best deal on a loan. An APR lets you see the total cost of a mortgage, including closing fees and lender points over the life of a loan - not just the interest due. Even though lenders are required by law to show a loan’s APR, they do not all use the same fees in their calculation, skewing the comparison. So always check tomake sure that the APRs you are comparing include similar fees.
Unlike an interest rate, an APR gives you a bigger picture when shopping for the best deal on a loan. An APR lets you see the total cost of a mortgage, including closing fees and lender points over the life of a loan - not just the interest due. Even though lenders are required by law to show a loan’s APR, they do not all use the same fees in their calculation, skewing the comparison. So always check tomake sure that the APRs you are comparing include similar fees.
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