Annual Percentage Rate, ( APR) is the annual cost of a loan, expressed as a yearly rate.  APR measures the true cost of the loan and it prevents lenders from hiding fees from you.  It typically includes pre-paid interest, points, origination fees, and private mortgage insurance (PMI), so APR is usually slightly higher than the actual interest rate on the loan.  All lenders are different therefore calculate APR differently.  For this reason the best way to compare lenders by interest rate is to look at the same loan type and term and compare points and closing fees. 

Last updated on November 16, 2010 by Admin