APR - Annual Percentage Rate Defined. Annual Percentage Rate (APR) is probably one of the most asked questions by homebuyers searching for a new mortgage or homeowners that wish to refinance their existing mortgage.
The Annual Percentage Rate (APR) is an effective way to determine the cost of borrower money. The Annual Percentage Rate (APR) is used not only for mortgages but also car loans, personal loans, and credit cards.
The most important fact to remember, is that your note rate and the annual percentage rate are completely different. The note rate is the rate that is used to determine your principal and interest payment. The annual percentage rate should be used for comparison between programs or when comparing the offerings from more than one lender.
Here is a great tool for you to use in calculating the Annual Percentage Rate