One of the things I like most about writing about personal finance topics is getting the chance to learn things I didn’t know previously. I’ve bought three homes over the years while I noted that my lenders provided both an interest rate and an APR, I never asked about the difference between those two numbers.
Recently, I had the chance to answer that question for Lending Tree. It made me wish I could go back in time and take a closer look when I bought my mortgage!
If you’ve ever applied for a mortgage, you probably received either a Good Faith Estimate or a Loan Estimate. If you’re like most of the clients I’ve worked with over the years, you just asked the lender what your monthly payment would be and shoved the Loan Estimate in a drawer.
But that lengthy and confusing piece of paper is actually pretty important for understanding the real cost of your loan.