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Most of us don’t have enough cash to pay for our houses up front, so we apply for, secure, and pay for mortgage loans. The lenders involved in the mortgage process check credit, debt load, income, and other important aspects of our financial lives before extending a loan.
How Do Mortgage Rates and APR Affect Your Loan?
Buying a home in Warminster PA most likely means you’ll be trying to land a mortgage loan, and as such, need to understand mortgage rates. It is also called an annual percentage rate (APR). Basically, this is the percentage amount the borrower pays the lender for the use of the money. For example, if the mortgage loan carries a 5% interest rate, the borrower pays 5% of the loan amount in interest.
What’s the difference in Mortgage Rates and APR?
With mortgage loans, the APR includes any points or costs involved with getting the mortgage loan, so it’s a broader term than “mortgage rate”. Depending on the mortgage loan you choose, some mortgage rates remain the same over the life of the loan, which are fixed rates, and some will vary over the loan term, which are adjustable.
What Else Weighs Into Mortgage Interest?
Credit scores, loan terms, and debt loads can all play roles in determining the mortgage rate you end up paying on your loan. That’s why its important to speak with a professional lender for an explanation of the entire mortgage picture.
Purchasing a home and living in Warminster means understanding unfamiliar mortgage terms and how they impact your ability to get approved for a loan and purchase a house. Educate yourself in the beginning so you can make informed, smart decisions.