The Annual Percentage Rate is the actual cost of the mortgage, based on the mortgage interest rate and factoring in other costs, including points paid and underwriting and processing fees
The Federal Truth-in-Lending law requires mortgage companies to disclose the APR when they advertise a rate. Typically the APR is found next to the rate.
Example:
| 30-year fixed | 8% | 1 point | 8.107% APR |
The APR does NOT affect your monthly payments. Your monthly payments are a function of the interest rate and the length of the loan.