Mortgage Loan: Annual Percentage Rate (APR) and the Truth in Lending Act

Tip! There are many advantages to finding mortgage rate options on the Internet. First, a number of people do not like talking on the phone. Online, you can get the information regarding mortgage rate options that you need and youā€™ll never have to dial a button or be put on hold. Because of this, finding mortgage rate options on the Internet is often faster. In fact, some search engines give you the mortgage rate averages for a variety of nation-wide lenders in one shot. Because it is a quick way to find a good mortgage rate, you can spend your time worrying about other things, like how much you need to borrow and what fees youā€™ll need to pay. Online, you can also find a mortgage rate at any time of day. If you work during the day, you may find the Internet much more convenient because you can go mortgage rate shopping at night or in the very early morning hours, time when a typical lender will not be in the office to answer your mortgage rate questions over the phone.

If you are in the market for a mortgage it is important to understand what the Annual Percentage Rate means and what you need to know in order to find the best mortgage. Here are tips to help you shop smartly for your mortgage loan.

Comparison shopping for a mortgage can be a difficult task. Mortgage lenders use one interest rate to calculate your monthly payment but advertise a different interest rate. What does it all mean anyhow? When you shop for a mortgage it is important to understand the difference in the two interest rates. Here is what you need to know.

The Annual Percentage rate (APR) is calculated by factoring in interest charges and any other fees charged by mortgage lenders over the duration of the loan. APR is expressed as a yearly expense. This formula gives you a good (but not great) estimate of the cost of any given loan offer.

Legislation in the United States, "The Truth in Lending Act," requires mortgage lenders to post the Annual Percentage Rates for all of their loan offers. This legislation is intended to protect borrowers form deceitful lending practices.

You will want to get the complete picture of all costs, including closing costs. Closing costs are listed on the "Good Faith Estimate" your lender is required to provide you after receiving your application. You will want to apply with more than one lender to get your hands on this Good Faith Estimate for all of the loan offers you are considering. You can learn more about finding the best mortgage loan and avoiding common mortgage mistakes by registering for a free mortgage guidebook.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

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Mortgage Loan: Annual Percentage Rate (APR) and the Truth in Lending Act