In mortgage lending, what does APR stand for?

The term APR stands for Annual Percentage Rate, which is a critical concept in mortgage lending and finance. APR represents the total yearly cost of borrowing, expressed as a percentage. It includes not only the interest rate on the loan but also any additional costs or fees that may be associated with obtaining the mortgage, such as closing costs and other charges. This comprehensive view allows borrowers to understand the true cost of a loan over a year, making it easier to compare different loan offers.

By presenting the total cost of financing in a standardized way, APR helps consumers make informed decisions and determine which mortgage is more financially beneficial over time. Understanding APR is essential for anyone involved in the mortgage lending process, as it impacts affordability and the long-term financial outcome of homeownership.