If you are interested in purchasing a new home, you'll need to research your financing options. One major part of financing is the annual percentage rate (APR). As you enter into a deal, you will likely know your area's prime interest rate, but you also need to learn about the lender's APR.
The APR is the final rate the lender charges you annually. After adding on any loan fees that are involved and points that will be charged, the final rate will usually be higher than the prime interest rate.
When applying for a mortgage, the lender must notify you about the APR within three days of receiving your application. The APR may change before final settlement, but there are limits on how much it can change.
So while shopping for a mortgage, make sure you know the annual percentage rate, as well as what you will have to pay for points, application fees and mortgage insurance.
Being fully informed is the only way you will be able to make the best decision
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