http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ Zillow Advice | Zillow Real Estate http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ Nate,<br/>Good post.&nbsp; APR is not the total driving factor especially when a lender&nbsp;hides <a href="http://www.zillow.com/directory/lenders/">lender</a> fees on non APR lines, such as on line 1311 and claims they are unrelated to the lender's compensation! Sat, 02 May 2009 05:54:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-05-02T05:54:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ Rajan,<br/>Clay is right in that APR is not a perfect measure.&nbsp; It is meant to help borrowers see the trade offs between interest rate and fees in an apples-to-apples manner, but there are limitations to it.&nbsp; I just wrote a blog post about the <a href="http://www.zillow.com/blog/mortgage/2009/05/01/what-is-the-difference-between-interest-rate-and-apr-annual-percentage-rate/">differences between rate and APR</a> on the Mortgages Unzipped blog on Zillow.&nbsp; I recommend it as it provides an overview of the topic.<br/>Thanks,<br/>Nate Sat, 02 May 2009 05:41:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-05-02T05:41:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ Hi Clay,<br/><br/>Your answer brings up other important factors to consider when evaluating loans. Seems like this calculator would be a good one for borrowers to use to compare <a href="http://www.zillow.com/mortgage/">mortgage loans</a>, yes, as it also takes into consideration how long one plans to live in the house (even though the <a href="http://www.zillow.com/mortgage/">loan</a> may be for thirty years, most people do not stay in a house that long)?<br/>http://www.getsmart.com/loan-resources/Mortgage-Calculators/Which-mortgage-is-right-for-you.aspx<br/> Tue, 28 Apr 2009 06:03:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-28T06:03:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ <p>The borrower should just focus on the rate and fees in the 800 section. If someone is comparing offers with the same terms like a 30 Yr Fxd and they have the same <a href="http://www.zillow.com/Mortgage_Rates/">interest rate</a>, then compare fees being paid in the 800 section like origination, discount, <a href="http://www.zillow.com/directory/lenders/">mortgage broker</a>, <a href="http://www.zillow.com/directory/lenders/">lender</a> fees. APR can be manipulated.</p> Mon, 27 Apr 2009 11:39:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-27T11:39:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ <em>"Do not get annoyed by the APR. Just worry about you interest rate.&nbsp; APR means nothing to you."</em> Means nothing to him as an agent or as a borrower? If you're saying it means nothing to a <a href="http://www.zillow.com/mortgage-glossary/Borrower/">borrower</a>, can you really make a blanket statement such as that? Mon, 27 Apr 2009 08:22:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-27T08:22:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ Spelling Thu, 16 Apr 2009 14:40:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-16T14:40:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ You can have no closing costs and the APR be&nbsp;about 1 point higher than the note rate, in some cases. Thu, 16 Apr 2009 14:28:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-16T14:28:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ As stated below, the <a href="http://www.zillow.com/Mortgage_Rates/">interest rate</a> is the note rate (the actual rate you pay).<br/><br/>The APR is simply some of the closing costs added to the <a href="http://www.zillow.com/mortgage/">loan</a> and then the taking into account the interest (payment) rate.<br/><br/>Not all closing costs are included in the APR.&nbsp; Do not get annoyed by the APR. Just worry about you interest rate.&nbsp; APR means nothing to you.<br/> Thu, 16 Apr 2009 14:17:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-16T14:17:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ You're an agent?&nbsp; I'm sorry, I thought that was like required reading to get a salesperson license.<br/><br/>Interest rate = Note rate. The rate that's used to determine your monthly payments<br/><br/>APR = Effective rate factoring in the note rate plus closing costs over the life of the loan.<br/> Thu, 16 Apr 2009 00:40:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-16T00:40:00Z http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ Google APR. Wed, 15 Apr 2009 23:16:00 GMT http://www.zillow.com/advice-thread/what%27s-the-difference-between-interest-rate-and-apr-and-what%27s-the-basis-of-ratio/224122/ 2009-04-15T23:16:00Z