The loan rates depend on the APR and Interest rates. Understanding how they work could be a great access to you.
What’s an APR, or annual percentage rate, exactly? And what’s the difference between the APR and the interest rate of a mortgage? For many first-time homebuyers applying for a mortgage, the difference between the APR and interest rate is a mystery. (Most repeat homebuyers would probably admit that the distinction isn’t so crystal clear to them either.)
The irony around this confusion is that the APR was created to bring transparency and clarity to the mortgage process. And on top of that, comparing the APR can potentially be misleading, if you aren’t careful. More on that in a moment, but first let’s discuss the difference between the interest rate and APR.