What Is APR for Mortgage Loans? What Is APR?

Very simply, APR stands for Annual Percentage Rate. Unfortunately, that's where the 'simply' ends. The intent of APR is to provide a single number that consumers can use to decide which of many loans, with many parameters, provides the best (ie least) cost option. All lending institutions must provide a calculated APR for each and every loan they write.

But, calculating the APR is a complex task, depending on the various parameters enter into a specific loan. Terms such as 'prepayed interest', application fees, points, etc all enter into the calculation.  I found an article on AllBusiness.Com (a D&B Company) that nicely explains the APR. Check it out at AllBusiness.com.