As Tom previously mentioned it is usually better to stick with comparing rate and fees with other offers than the APR method.
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?"
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.
REALTORÂ® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
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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.
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