The interest is the price you pay to borrow money to buy a home. For example, when you take out a mortgage, you agree to pay back the original amount you borrowed plus a percentage of the loan amount as interest. The interest rate or note rate is the cost you pay each year for the loan, not including the fees to get the loan.
What's an APR?
The Annual Percentage Rate is more comprehensive because it represents the total cost of the loan. The APR is your annual interest rate plus any costs or fees for getting the loan. Because it factors in both the interest rate and expenses, the APR is usually higher than the note rate.
Some of the fees factored into the APR include:
Lender origination charges such as discount points, underwriting, and processing fees
Some third-party costs, like the title company's settlement fee
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