topic Re: Difference between rate and apr in Mortgage Loans

Difference between rate and apr

Anonymous — Thu, 15 Sep 2016 14:38:15 GMT

I am applying for a state sponsored loan in NY call SONYMA acheiving the dream, and was wondering why the programs rate and APR are the same
while the others all have a difference?

https://www.hvfcu.org/rates/loans/mortgages

PS poking around.. I noticed that there is barely a bump between rate and APR in well fargo loans.

Why such a big difference in banks?

Re: Difference between rate and apr

youdontkillmoney — Thu, 15 Sep 2016 18:57:07 GMT

APR is the annual rate of interest without taking into account the compounding of interest within that year.

Alternatively, APY does take into account the effects of intra-year compounding.

Re: Difference between rate and apr

Anonymous — Thu, 15 Sep 2016 22:56:49 GMT

@youdontkillmoney wrote:
APR is the annual rate of interest without taking into account the compounding of interest within that year.

Alternatively, APY does take into account the effects of intra-year compounding.

Then any idea why/how the NY state backed mortgage programs Rate and APR are the same on that link while all commercials are not?

Re: Difference between rate and apr

Anonymous — Thu, 15 Sep 2016 23:37:46 GMT

The interest rate is the cost of the principal loan amount.

The APR is the actual cost of your mortgage and interest rate, it includes, bank fees, points and some closing costs.

APR varies between lenders depending on what's added into the cost if the loan and what needs to be paid at closing.