Preferred Mortgage, Inc. Last Updated

Today's Rate - 30 Year Fixed

Interest Rate 6.0%

APR (based on $100,000 loan) 6.173%

PAYMENTS

Loan $100,000

Rate 6.0%

Years 30

Payment (pri & int only) $591.54

CLOSING COSTS

Origination - 1% $1000

Discount Points - 0% $0.00

Appraisal $350

Credit $36

Tax Service $73

Processing $350

Underwriting $475

Flood Certification $23

Settlement Fee $125 Title Insurance $417 Title Endorsements $55 Recording Fee $65

Shipping $30

Total Closing Costs $2,999

APR - What is it?

The APR is not the interest rate on your loan. It is a comparative rate that takes into consideration the effect lenders closing costs have over total finance charges for the life of the loan.

The purpose of the APR is to enable consumers to better compare different loan options. If two loans with different interest rates and different closing costs were paid off over a 30 year period with no early payments made. The loan wih the lower APR would have the lower total financed charges.

The APR can also be very misleading, especially if the loan is paid off early. In cases where the borrower pays extra closing costs to buy-down to a lower interest rate, the APR will be lower and it will appear to be a better deal. If, however, the loan is paid off early, say in two years, the total finance charges will be much higher even though there was a lower APR. It takes 5 to 8 years to save enough from dropping the interest rate to cover the initial buy-down.