Home Loans And Annual Percentage Rate

Annual Percentage Rate is an index used to compare home loans. It is a somewhat artificial rate that was designed to compare the true cost of home loans. Different banks calculate Annual Percentage Rate in different ways, so that comparing the rate of two loans does not actually show which home loan is cheaper. Lenders consider the following in calculating APR:- points of a home loan. - the interest paid between the loan closing date and the end of the month.- home loan processing fee and underwriting fees.- document preparation fee.- home loan private mortgage insurance. Some banks also include home loan application fees and credit life insurance, which pays the home loan off in the event of your death.

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