Can someone please explain to me the difference between the interest rate and APR and how the APR differs between quotes based on the same rate. I am very confused. Kara
The APR is the equilvalent interest rate after other cost are added. For ex. you may be quote a mortgage rate of 7% but by the time you add inclosing cost the effective rate may be more like 7.25%. On a cc you may have a fixed rate of 7% but, if there are minimum finance charges or cash advance fees, etc. then the APR will be higher.
You mean a couple of thousand in fees can make your APR change that much higher than your RATE for 30 years. Seems weird to me. Kara
Kara, You get a $100K plus mortgage and see how stuff starts to add up at closing. Also, to weird you out further, if you choose a 15 year mortgage the apr will be higher than the 30 year because the closing cost are amortized out over a shorter period of time.
