Financing in Humble>Question Details

roelster8, Home Buyer in Humble, TX


Asked by roelster8, Humble, TX Thu Jun 14, 2012

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An APR compares various loans that may have different rates and fees (i.e. 3.5% with higher fees and a 3.75% rate with lower fees). The lower APR is the better deal for you assuming you make the minimum scheduled payment every month for the full term of the loan (will you be in the home for 15 or 30 years?). In the 16 years I have been in this business I've only been asked one time about my APR. The applicant didn't care about the interest rate as he just wanted to compare APRs. He was a CPA so he was very well aware of numbers.

As Tom previously mentioned it is usually better to stick with comparing rate and fees with other offers than the APR method.
1 vote Thank Flag Link Thu Jun 14, 2012
I beg to differ with Don a little.... And would like to clarify my original answer.

Lenders that forget to check off boxes correctly(in calculating APR) are mostly out of business or soon will be after their next audit.

APR is still a valid tool. I just don't like it because it is a leap of faith and doesn't encourage the borrower to 'what if' their loan offer.
Will you pay off early?
How long will you stay in the loan?
Then APR doesn't apply if you don't fit inside the box of someone who will happily pay their loan off in equal 360 payments.


Ask lenders lending questions
Ask realtors realtor questions
Ask a person acting as a lender & realtor: "Which one are you good at?"

Good Luck!
0 votes Thank Flag Link Thu Jun 14, 2012
APR is a direct result of certain fees that are charged. Not all fees go into the calculation of APR and some lenders "forget" to check boxes to calculate the APR correctly.

Because of this I would not look at APR but look at the total fees charged for a given interest rate. APR looks like an interest rate but it is not an interest rate. If your loan had zero closing costs your APR would equal your interest rate.

When comparing GFE's from different lenders request a REAL GFE and a Breakdown of fees. Look at your adjusted origination charge. This fee accounts for any credit you may also be receiving for the interest rate you have chosen.

Please feel free to call or email me any questions.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157 |
0 votes Thank Flag Link Thu Jun 14, 2012
Thanks for all your help!
0 votes Thank Flag Link Thu Jun 14, 2012
Depends on down payment. Loan type.

APR is a way to compare two loans with different rates and fees.
Interest rate is what the debt is amortized with.

I prefer to compare rate + fees with competing offers.

Tom Burris
Mortgage Banker
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
NMLS# 335055
Search Dallas area MLS for FREE. No registration =>
0 votes Thank Flag Link Thu Jun 14, 2012
Interest rates are at a all time low and will not stay there. They will eventually go up. I would say with a 700 credit score you could get a loan of under 4 percent. APR is just calculated Annually. I would love to work with you on getting your home.

Heidi Dix
0 votes Thank Flag Link Thu Jun 14, 2012
Neither, what is most important is your plan and overall debt structure. Most home buyers think there is something unique about financing real estate, there isn’t. It is a debt. I have had people bust my chops over an eighth of a point on a mortgage while carrying $100,000 + on credit cards that at the time were between 14% & 18%. Financial transactions that carry debt are not islands, in fact, even the ones that have no debt associated with them can have an impact.

Structuring the deal so that it fits in your puzzle is the most important thing to watch.

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Thu Jun 14, 2012
Give me a call and we can discuss. Theresa Harrison, 281.705.3674. Thanks
0 votes Thank Flag Link Thu Jun 14, 2012
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