What is an APR (Annual Percentage Rate) and why is it different from my note rate?

The APR is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is typically higher than the note rate you will be quoted. The reason for this, APR takes into account points and other costs of doing the loan. The APR allows homebuyers to compare different types of mortgages based on the annual cost of each loan. The APR was developed to create a level playing field and makes it easier for you as the consumer to shop from bank to bank and lender to lender. Keep in mind the APR does NOT affect your monthly payments. The note rate your loan officer quotes you is how your monthly payment is figured.

Loans with a lower APR are not always better deals, so be cautious. Certain types of lending institutions legally do not have to disclose all their fees or can calculate APR differently than others. The best way to compare loans is to ask your loan consultant, whether that be with Infinity Financial Group or not, to provide you with a GFE (Good Faith Estimate) that shows all costs and breaks down your new payment. These documents can be overwhelming with number and information, so make sure you ask your loan consultant to explain it line by line.