The annual percentage rate (APR) and the interest rate are two distinct measurements of borrowing money. 

The interest rate is the rate used to calculate your monthly payment. It’s essentially the cost of borrowing that principal amount of your loan.

“If you’re mainly concerned about making payments, you may want to just focus on the interest rate.”

APR, however, is broader. It includes the interest rate but also includes your lender fees, your discount points (if applicable), and some of your title charges. It’s a more encompassing measurement of what it costs to get a home loan. 

If you’re mainly concerned about making payments, you may want to just focus on the interest rate. That’s especially true if we’re employing a strategy where the seller will pay your closing costs. 

However, if you’re paying all or part of your own closing costs, APR becomes important. In that case, you’ll want to see what the total cost of borrowing all of that is. This allows you to comparison shop to see what truly is the best loan product for you. 

If you have any questions about this difference or you’re interested in buying or selling soon, please feel free to reach out to me via phone or email. I’m always happy to help you in any way I can.