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Annual Percentage Rate (A.P.R.)
The actual cost of a mortgage loan expressed as a yearly rate. The APR will be higher than the interest rate stated on the application and note because it includes fees such as: interest, discount points, origination fee, mortgage insurance and other related fees. The truth in lending act requires lenders to disclose an APR to assist the borrower in measuring the actual cost of a loan. |
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Effective interest rate
The effective interest rate is the mortgage cost on a yearly basis expressed as a percentage includes charges paid when closing the loan including compounded interest. Higher closing costs or more frequent compounding result in a higher effective interest rate. |
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Gross Monthly Income
The total monthly income earned before taxes and any other deductions. |
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V.A. Mortgage Funding Fee
A premium assed to the VA borrower in lieu of mortgage insurance. First time VA borrowers have a 3% funding fee included in their loan. When the VA borrower sells their home and uses their VA rights on a new home, the funding fee is 2%. VA borrowers refinancing their home, have a half percent funding fee in their mortgage. Disabled Veterans are not burdened with the funding fee. |
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