What is the APR?

APR stands for Annual Percentage Rate. It’s the true yearly cost of borrowing money, expressed as a percentage.
It includes:

  • Interest rate (the base cost of the loan)
  • Lender fees (like loan origination fees, discount points)
  • Mortgage insurance (if required)
  • Other closing costs (in some cases like the title company’s settlement fee)

While the interest rate tells you how much you’ll pay in interest each year, the APR gives you a fuller picture of what you’re really paying.

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