In the mortgage industry, APR stands for Annual Percentage Rate. This figure informs the borrower how much the loan is costing on a yearly basis, including the amount borrowed and all included closing costs.
Once you’ve decided on a loan amount and an interest rate, find out all of the costs, such as origination fee, processing fees, appraisals and more.
Add these to the fields on the APR calculator, and you’ll see that your interest rate goes up slightly in most cases, the APR calculator is factoring in the cost of the loan into your monthly mortgage payment.
If the difference in your actual interest rate and your APR interest rate are considerable, you might be paying too much for the loan.