Showing posts with label apr. annual percent rate. Show all posts
Showing posts with label apr. annual percent rate. Show all posts

Mortgages 101: Understanding APR - CBS 5 - KPHO

Mortgages 101: Understanding APR - CBS 5 - KPHO

By Kirk Haverkamp
Provided by
One of the most important terms you'll come across when shopping for a mortgage is APR, or annual percentage rate. But what exactly does it mean?
Simply put, APR is a way of indicating the real cost of a mortgage, expressed as an interest rate. While the regular interest rate is the first thing most people look at when pricing a mortgage, the APR also takes into account the closing costs and other fees that are built into a loan.
When you take out a home loan of any sort, whether you're buying a home, refinancing a mortgage or taking out a home equity loan, the interest rate is not necessarily a good indication of what you're paying for the loan. Many lenders will offer low "teaser" rates to draw borrowers' attention, but add in so many additional fees that it ends up costing more than a loan with a higher interest rate but fewer fees.
How APR works
The APR is an effort to level the playing field by rolling those fees into the cost of the loan. In essence, the APR is the interest rate that would produce the same monthly payment on a mortgage with zero fees as a mortgage at the stated rate with the fees included in the loan.
For example: Suppose you take out a 30-year fixed-rate mortgage for $200,000 at 4 percent interest with $6,000 in closing fees (the size of the down payment doesn't matter). Including the $6,000 in fees in the loan, that means you would borrow a total of $206,000 at 4 percent interest, giving you a monthly mortgage payment of $983.48, not counting homeowner's insurance, taxes or other expenses typically billed along with the mortgage itself.
On that mortgage, your APR would be 4.2168 percent. That's the interest rate that would produce a monthly payment of $983.48 on a $200,000 mortgage with no fees. Basically, it's what it would cost you to borrow your closing fees at the same rate as the rest of the mortgage.
By law, a lender has to disclose the APR when you apply for a mortgage. It will appear on the Truth in Lending Act form you receive when applying.
Using APR to compare loan offers
An additional 0.2168 percentage points isn't too bad in terms of closing costs. But suppose that same mortgage features $12,000 in closing costs? That would give you an APR of 4.4716 percent -- your closing costs are equal to nearly an additional half a percent in interest. That's a pretty significant increase.
The APR is designed to let you make an "apples-to-apples" comparison between two different mortgages with different interest rates and fees. So a mortgage with an interest rate of 4.125 percent and an APR of 4.391 percent would appear to be a better deal than another loan with an interest rate of 4.0 percent but an APR of 4.462 percent.
APR Shortcomings
While the APR is a useful guide to comparing the cost of different mortgage options, it's not completely fail-safe. For one thing, it's based on paying off the mortgage over the full amortization term -- but most people either sell their home or refinance their mortgage at least once before their mortgage is paid off. So that can throw off the calculation.
Discount points are a way of buying a lower interest rate by pre-paying some interest at the time of closing. Buying points can make financial sense if you have the mortgage for a long time, but aren't such a good deal if you sell the home or refinance within a few years.
In general, a mortgage with higher fees but a lower interest rate becomes more attractive the longer you have the loan, because you have more time for the savings from the lower rate to accumulate.  
View the original story here:


Interest Rate vs. APR

If you're looking to buy a home or already own, you're probably familiar with the terms "Interest Rate" and "APR." They're both used when referring to mortgage rates, but why are both quoted and what makes them different?
Knowing the difference is very important and could save you thousands of dollars on your mortgage.
At the highest level:
  • The interest rate is the cost of borrowing the principal loan amount.
  • The APR — or Annual Percentage Rate — is a broader measure of borrowing and includes not only the interest rate but also any other costs to get a loan such as discount points, insurance and closing costs.
Quoting the APR became industry practice as part of the Truth in Lending Act, a federal law passed in 1968 to protect consumers by requiring the full disclosure of the terms and conditions of finance charges in credit transactions.
Given the same interest rate, higher APRs indicate more costs associated with obtaining a loan, including fees and points. Because of this, it's important to shop around and get APRs from several lenders, allowing you to compare all fees, apples–to–apples, and determine which lender is right for you.
If you're focused on getting the lowest monthly payment, the interest rate is likely the top priority for you. If your focus, however, is the total cost of the loan over time, the APR may be your most valuable tool.
While looking at interest rates and the APR are important, take some time to learn more about other important costs that factor in.

Fill out my form!

Kentucky Mortgage Rates

Due to Volatility in the current mortgage market, mortgage rates are currently not being posted.

Please call for a mortgage rate quote. 


                                                            Open Today 9:00 am -7:00 pm

rising rates
Kentucky Mortgage Current Interest Rates
Fixed Rate Programs

Rates  not current. Call for current Rates. 

 Conforming 30 year fixed

28 / 41Prequalify
Kentucky Mortgage Only- Rates Change w/o notice
Conforming 20 year fixed

40 / 41Prequalify
kentucky mortgage rates only- change w/o notice
 Conforming 15 year fixed

28 / 41Prequalify
kentucky mortgage rates only- change w/o notice
 FHA 30 year fixed

35 / 50Prequalify
kentucky mortgage rates only- change w/o notice
 FHA 15 year fixed

35 / 50Prequalify
kentucky mortgage rates only- change w/o notice
 USDA 30 year Fixed

31 / 45Prequalify
kentucky mortgage rates only- change w/o notice
 VA 30 Year fixed

41 / 41Prequalify
kentucky mortgage rates only- change w/o notice

Kentucky Mortgage  Rates are subject to qualifying criteria and Mortgage Rates can change without notice.
Assumptions include a 640 or higher credit score for FHA, USDA, KHC,  and 620 credit scores for a VA loan. A loan amount of $100,000.00 is assumed and a 30 day lock required for a Kentucky Mortgage Only.

A 720 credit score or higher is assumed for a Kentucky Conventional Rate Mortgage loan rates and a loan amount of $100,000.00. The loan to value for Kentucky Conventional loans are assumed at 80% ltv or less.

  • The displayed Annual Percentage Rates (APRs) reflect the interest rates, total points, and additional estimated pre-paid finance charges for the loan products shown for Kentucky Mortgage Rates, but do not include other closing costs.
  • The approximate cost of prepaid finance charges does not constitute and is not a substitute for the Good Faith Estimate of Closing Costs (GFE) that you will receive once you apply for a Kentucky Mortgage  loan. This is not a Kentucky mortgage loan approval or commitment to lend. The actual fees, costs and monthly payment on your specific loan transaction may vary and may include additional fees and costs.
  • For loans with less than 20% down payment borrower-paid mortgage insurance may apply.
  • These Kentucky  mortgage rates are based on a variety of assumptions and conditions which include a consumer credit score which may be higher or lower than your individual credit score. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit profile up to the time of closing.
  • FHA

    • Kentucky FHA loans require both an upfront and an annual mortgage insurance premium. The premium varies based on the loan characteristics, your credit score, whether you’ve received loan counseling, and other factors. All Kentucky FHA loans require a minimum credit score of 640
  • Jumbo

    • Kentucky Jumbo Mortgage  rates are higher for borrowers who do not meet the criteria for Conventional Mortgage Loans. All Jumbo loans require a 680 or higher score and a maximum loan to value of 80% 
  •   VA Loans
                Kentucky VA loans require a funding fee upfront paid to VA in the form of mortgage insurance .he premium varies based on the loan characteristics, your credit score, whether you’ve received loan counseling   factors. Kentucky VA loans require a minimum credit score of 620
  • USDA Loans
                         Kentucky  USDA loans require a funding fee upfront and a monthly mortgage insurance premium paid to RHS/USDA. The premium varies based on the loan characteristics, your credit score,    and other factors. Kentucky USDA loans require a 640 minimum credit score. 

Free Credit Report and Pre qualifications available anytime. 


.  Joel Lobb (NMLS#57916) is a licensed mortgage loan officer in the state of Kentucky.

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. 

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage (NMLS #1800) 107 South Hurstbourne Parkway*
Louisville, KY 40222*

Louisville Ky Mortgage Rates

Louisville Ky Mortgage Rates FHA, VA, KHC, USDAKentucky Housing Loans Jefferson County KentuckyKentucky FHA loansKentucky FHA Mortgage LendersFirst Time Home Buyer Louisvill eKy100_percent_financing Louisville Kentucky
Louisville Ky Mortgage Rates, a set on Flickr.
Louisville Ky Mortgage Rates, by Louisville Ky Mortgage Rates FHA VA USDA KHC