Saturday, May 07, 2005

10 Year Refinance Mortgage Rate

This is because investors are always looking for the best return on their investments. If you keep an eye on the Fed rate, and the rates offered by the big Savings and Loans, you won't go far wrong. Key to understanding interest rates is the concept of 'APR' or 'Annual Percentage Rate'. This is a figure used to compare loans from different lenders on a 'fair' basis, because most loans nowadays have different conditions and extras attached to them that have a direct monetary value.In the USA and elsewhere, mortgage companies must disclose the APR when they advertise a loan rate. This shows the true cost of the loan to the borrower, expressed simply as an effective yearly rate. It basically stops lenders from hiding fees and front-loaded costs behind the small print of what appears to be a low interest rate. Here's a simple example. Say you borrow $100 for a year at 5% interest (i.e. you will owe $105 at the end of the year). Say you also have to pay a $5 'introduction' fee, and your total cost to borrow the money will then be $10. What this means is that the APR is actually 10%, even though the advert that drew you to the loan in the first place may have legitimately quoted '5%' elsewhere. The APR, however, must admit that the real rate is equivalent to 10%.Having decided on the loan you want, your next step is to meet with the lender. Nowada
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