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bjbjs Know Your Home Loan Diction-Carrie Edition 1 APR Hey there! Welcome to the first edition
of Diction-Carrie. I ve decided every month that I am going to pick a word, try to simplify
a term that we use in the mortgage and real estate industry and explain it in layman s
terms because let s face it, when we talk about mortgages, real estate financing, it
often sounds like a foreign language. And we want consumers to be able to truly understand.
So this month, we re going to talk about APR, also known as annual percentage rate. And
you ve probably heard the APR term when you ve done some other type of financial transactions
so be that your credit card statement or an auto loan. But check out this definition from
a friend of mine who gets paid to explain things for a living. APR, annual percentage
rate, not your interest rate. The government requires the tabulation of fees in addition
to your interest rate so things like origination charges, mortgage insurance, points and other
fees associated with your loan to be shown as a yearly rate. This number will absolutely
appear higher than your actual interest rate as when you combine all of these things together.
They re showing you the real cost associated with your loan. Now, if you understand that
really simplified definition, it may confuse you as to why we need to disclose it at different
times when we re saying different things and where it s required to be disclosed by the
government. So in general, when we re making general statements like you may have heard,
mortgage interest rates are at historic lows. When we make statements like that, we re required
to state an APR, an interest rate plus cost that you might pay associated with a loan
when we don t necessarily even know the details of your particular financial circumstances.
So that might not make sense to you and we feel your pain. What you need to understand
is that we are here to help you demystify all of that. When you have questions, you
need to give us a shout. We re here to make sure you understand all of the aspects associated
with getting your home loan whether that s your first home, your next home, or refinance.
Just contact us. PAGE \* MERGEFORMAT gdS? gd