The Annual Percentage Rate (APR) represents the yearly cost of borrowing, expressed as a percentage. It includes both the interest rate and any additional fees or costs associated with the loan. APR provides a comprehensive measure to compare different loan products.
An application fee is a charge levied by a lender to a potential borrower for the time and effort required to accept and begin processing a loan application. This fee often covers the cost of an appraisal and a credit report.
A mortgage discount refers to an initial amount deducted by lenders from the principal of a loan, often represented in terms of 'points.'
Negative leverage, also known as reverse leverage, occurs when the cost of borrowing exceeds the income generated by an investment, resulting in a lower overall return.
The rate of interest, also known as the interest rate, is the proportion of a loan that is charged as interest to the borrower. It is a crucial factor in real estate financing and investment.
