Mortgage rates in advertisements

Discussion List

Brian Lange

Group Expert

Sep 14, 2008 11:34:34 AM

This post has not been rated.

In today's papers Navy Federal Credit Union advertises 30 year fixed rate mortgages "as low as 5.375" . Next to this rate the APR is listed as 5.534%
As a borrower I assume I would pay the higher rate for a loan. What does the lower rate mean? Is it significant or more of an advertising strategy?

John Reilly, e-PRO

Group Organizer

Sep 14, 2008 3:43:22 PM

This post has not been rated.

The lower rate is the interest portion. The Annual Percentage Rate is an expression of the relationship of the total finance charge to the total amount to be financed as required under the federal Truth-in-Lending Act.

See http://www.realtown.com/words/annual-percentage-rate

william.tabije@navy.mil

Group Member

Sep 17, 2008 3:35:36 PM

This post has not been rated.

As a new Realtor, I too wondered about these figures before. Thanks for enlisghtening me regarding this situation.

Discussion List

Reply to Discussion

Please log in to post a reply to this discussion.