Mortgage APR Calculator – Make the Best Choice
We always hear APR when we look at mortgages, but what exactly is this term? Before we get acquainted about the mortgage APR calculator, let us first understand what APR is and how it affects your mortgage. When applying for a mortgage, the lender is required to tell you about the interest rate as well as the annual percentage rate. The APR is distinct from the interest rate and it is there in your mortgage so you can have a comparison tool when shopping for loans. This is the ultimate tool when researching for loans since you can use the APR in order to determine the economy of getting a specific loan from another one. While loans may seem similar to each other, the APR proves that they are distinct, just like having apples and oranges on a basket.
With the mortgage calculator you can determine the annual percentage rate of a mortgage depending on the amortization or the term of your loan. You can analyze the APR through the mortgage APR calculator by utilizing some important components. First, you need the mortgage amount, the term and the interest rate. The mortgage calculator also requires you to include the closing costs. With the APR calculator, you have to specify the origination fee (percentile form), the points you paid, and other fees that you have to include.
Once you have secured all the details, the mortgage APR calculator will present the APR in percentile format. However, at the moment, you might still be puzzled about the whole point of using the APR calculator. How does this actually make any sense? Well, the calculator is only ideal if you have already received quotes and estimated from lending companies. The results from the mortgage calculator can tell you the net effective cost of getting a loan. This is the present value of the funds within the length of your contact. The APR calculator helps you answer the question if paying more upfront is ideal so you can lower your rates.
With the mortgage calculator, you can easily determine how one loan fares against the other. Let’s say that Lender A offers 6.5% that requires $5000 in total fees and no discount points. On the other hand, Lender Z offers a loan at 6.25% with a 1 point discount but with $5500 in fees amounting to a total of $7000 in all points and fees. Looking at these factors, you can all use them in the mortgage APR calculator to determine the APR. In this example, Lender Z has a lower APR of 6.7% compared to Lender A’s 6.83%.
Knowing more about the APR can clearly save you from bad mortgage decisions. Let us help you further in finding the best mortgage deals. All you have to do is choose a loan type, then select your state and your credit profile so you can receive estimates from top lenders.