Interest rate/ APR range (loan, fees, loan, lender)

[ogplife]

When you look at the rate for certain mortgage loans it has an interest rate and an APR range. What is the difference between the two?

[DanielChang]

APR factors in other fees and helps you compare actual cost of loans versus the interest rate, which doesn't take into points, prepaid interest that kind of stuff. You want both the lowest APR and the lowest closing costs when you're shopping for a loan.

[ChipL]

Your payment is based on the interest rate.

APR is a combination 'interest rate/closing cost' number. The purpose of the APR was originally to aid in comparing differing loan scenarios based solely on rates and closing costs.

[renriq02]

be careful with shopping by the APR.

two lenders may have the same fees and interest rate but the APR maybe calculated differently.

I would shop by interest rate first....then compare closing costs.
APR is generated from the closing costs.

If you only compare APR then you wont see if the closing costs are average.....and/or if they're charging you too much or it's a junk fee.

If it's a purchase transaction...compare the 800 lines....the 1100 lines are fees from the title company/attorney, and can be shopped as well as shopping for a lender