Zillow Advice: Refinance - What is the difference between Interest rate and APR on refinance loan?

nataliapl,I just created ...

Sat, 02 May 2009 05:19:00 GMT

nataliapl,
I just created a blog post explaining the difference between interest rate and APR on the Zillow Mortgages Unzipped blog. I recommend you check it out.
I hope it helps.
Thanks,
Nate

nataliapl, if you are not ...

Thu, 30 Apr 2009 11:06:00 GMT

nataliapl, if you are not paying mortgage insurance and are doing a conventional loan, you will be paying 4 points in fees that apply to the APR. If you are doing an FHA loan or a conventional loan with MI, the APR will be higher than what they are telling you. APR on an FHA loan would be 5.538% BEFORE any fees like origination or discount points are factored in. A conventional loan at 81-85% loan to value would have an APR of 5.349% BEFORE any fees were added. This is not a Zillow lender, correct? If an appraisal is being used, what is the value of your property? Are you doing an FHA, Conv, or VA loan?

The interest rate, is the ...

Wed, 29 Apr 2009 21:15:00 GMT

The interest rate, is the actual rate of interest you will be paying on the money borrowed. The APR is designed to reflect the total costs of borrowing. The APR takes into affect your rate and certain costs associated with the loan, i.e. origination fees, processing fees so forth.

In comparing loan quotes I would be more concerned with comparing the interest rate and total closing costs with each lender.

In theory it's the amount ...

Wed, 29 Apr 2009 21:14:00 GMT

In theory it's the amount you will be paying total, so my guess is you have a number of points on that loan which is why the APR is high.

APR is the cost of your loan ...

Wed, 29 Apr 2009 21:13:00 GMT

APR is the cost of your loan expressed in a percentage rate. Costs are fees such as processing, underwriting, points, title fees, etc etc. If the cost to complete the loan was $0 then the note rate and the APR would be exactly the same.

It's 30 years fix for ...

Wed, 29 Apr 2009 21:11:00 GMT

It's 30 years fix for 445000

Out of curiosity can you ...

Wed, 29 Apr 2009 21:09:00 GMT

Out of curiosity can you let me know your loan amount and the term, i.e. 15 or 30 year fixed?