What is the definition of annual percentage rate.
What does APR mean?
Andrew Lippert: APR stands for Annual percentage rate, it has to do with the purchased price, the interest rate and the fees, some of the fees. It just has to do with some of the fees that the government especially mandates that we include in that APR in order to show people. When they’re purchasing real estate some people might call the mortgage rate 4.125% and attach a whole bunch of fees so you really have a 5% APR. You need to also pay attention to that APR when purchasing a new home.
Barry Mathis: That’s awesome. A lot of times that does trip people up. My understanding is a lot of times this causes problems at closing because they thought they’re getting a 4.125%% APR and next thing you know they’re getting a 5% annual percentage rate because that includes the fees.
Hope you enjoyed the first of our real estate glossary terms.
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