Note Rate is Lower than APR When you Compare Mortgage Rates

In order to help standardize the process of comparing mortgage rates and fees, lenders are required to quote the APR in addition to the mortgage note rate.

The annual percentage rate will almost always be higher than the note rate of a mortgage because certain fees are included in the calculation.

Mortgage fees usually included in the APR:

• Loan processing fee
• Document preparation fee
• Underwriting fee
• Private mortgage insurance cost, if applicable
• Discount points
• Origination points
• Pre-paid interest amount

There are other closing costs in a mortgage which are not included in the APR, such as, credit reports, appraisals, notary, recording fee, title insurance, and escrow fees.

Compare Mortgage Loan Rates