Annual Percentage Rate (APR) in Florida
The annual percentage rate (APR) is the standardized expression of the total cost of borrowing a mortgage, combining the interest rate with certain lender fees to create a single comparable figure. The Truth in Lending Act (TILA) requires Florida lenders to disclose the APR alongside every mortgage offer.
What APR Includes
The APR calculation incorporates the note interest rate plus origination fees, discount points, mortgage broker fees, and certain prepaid finance charges. It does not include third-party fees such as title insurance, appraisal costs, or recording fees. The resulting number is always higher than the base interest rate and provides a more accurate picture of the loan's true annual cost.
Using APR to Compare Florida Loans
APR is most useful when comparing loan offers of the same type and term. A 30-year fixed mortgage at 6.75% interest with high origination fees might have a 7.15% APR, while a competing offer at 7% interest with no points might show a 7.08% APR, making the second offer less expensive overall. Florida borrowers should compare APRs alongside the Loan Estimate document, which breaks down all costs in detail under TILA-RESPA Integrated Disclosure (TRID) rules.
Related Terms
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Barnes Walker advises Florida borrowers on mortgage terms and lending disclosures. Contact our real estate team for transaction guidance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC