APR
The yearly cost of a loan including interest plus most fees, shown as a percentage. Helps compare loans, though it assumes you'll keep the loan the full term.
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Part 1 of 4
Why a seller cares
The APR is the buyer's all-in cost of their loan, and it does not show up in your sale at all. It matters to a seller only when comparing quotes on a loan of your own for the next home.
Part 2 of 4
A simple example
Two quotes for your next mortgage: 6.25% with $6,000 in fees, or 6.5% with $1,000 in fees. The APR folds the fees into one number.
| The quote | What the APR tells you |
|---|---|
| 6.25% rate, $6,000 in fees | A higher APR than the rate, because of the fees |
| 6.5% rate, $1,000 in fees | An APR close to the rate |
| Keeping the loan only five years | The APR overstates the fee-heavy loan's true cost; it assumes the full term |
APR compares loans held to the end. For a short stay, the fees matter more than the number suggests.
Part 3 of 4
What people get wrong
That the APR is what you pay. The rate sets the payment; the APR is a comparison figure that assumes the full term.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
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