About APR Mortgage Insurance
When dealing with APR mortgage insurance, remember that APR stands for annual percentage rate and that the APR is the cost of borrowing money on an annual basis for a mortgage. Find out how mortgage insurance can affect the APR with help from a financial specialist in this free video on mortgage assistance and personal finance.
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Hi this is Matthew McKilen with Innovative Financial Group, the question that was posed to me today is what relationship does mortgage insurance have to the APR on a mortgage. First off the APR is just a nickname for annual percentage rate, that's just the cost of borrowing money on an annual basis for your mortgage. There are a few different factors that effect that. One is the actual the note rate you are paying on the loan, any and all closing cost, that may be amortized over the life of the mortgage can also effect the APR. And thirdly, mortgage insurance can also effect the APR. The definition of mortgage insurance is a separate insurance policy that is built into your loan if you are purchasing a home or refinancing at over eighty percent loan to value. The policy is there to protect the lender then in the case of a default the bank has an insurance policy to cover for lending you that mortgage without having the twenty percent factor down. So all of these combined can lead to effecting your APR, annual percentage rate, which is generally a bit higher than what the actual effective rate or interest you are paying on your note. Thanks again, this is Matthew McKilen with Innovative Financial Group.