Chances are you’ve heard the term “APR” on credit card commercials, but tons of Americans have no idea what it actually means. So before you refinance mortgage rates or apply for home mortgage interest rates to purchase a home, you should understand what this term really means.
APR — Annual Percentage Rate
An Annual Percentage Rate is the total interest rate in a one year period. There’s also the Effective Annual Percentage Rate, which represents a year’s worth of compound interest plus fees. Essentially, the APR was designed to give home buyers and other loan applicants information on their total annual costs. If you want to refinance mortgage rates or apply for some other type of loan, then the APR will be used to calculate the best interest rates available to you.
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