What you need to know about the difference between an annual percentage rate and interest rate 

Quotes:

"Look at the overall loan. The interest rate is absolutely important. A lot of lenders will make it look much better than it is by having a lower rate if they know they're competing, but then you look at the annual percentage rate which most people do not pay attention to and they're charging a whole lot more fees to get the same type of loan."

Show Notes:

00:00 Houston Inside Out show introduction.

00:20 We're going to clear up the difference between annual percentage rate versus interest rate. 

01:34 ] It's required by law to put the annual percentage rate. We're going to focus specifically on a mortgage loan and how the annual percentage rate differs from an interest rate. All the costs that are associated with that loan are calculated into what is called the annual percentage rate., 

02:40 The annual percentage rate, that is what separates lenders. It's what separates loan products

03:45 A point is nothing but a percent. That's it. When you hear these terms, two points, three points, four, it's just a percentage of the loan amount.

04:55 There's a fee involved with the closing that the lender and the title company charges. However, depending on the source of the money, you may have to pay some taxes as it relates to where that money is coming from.

05:55 Just be sure that you're not just focusing on the interest rate as a lot of people tend to do.

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