Colorado Refinance FAQ's

What is APR - Annual Percentage Rate?

APR is an interest rate that reflects the total cost of financing a loan. It is a combination of the simple interest rate, any discount points, and the fees paid to a lender when getting a mortgage.

The APR is an important parameter when comparing loan offers from different lenders who may have widely different fees they apply to their loan offers. A lender who offers a low, simple interest rate but has a much higher APR has fees which are adding costs to your financing. Simply put, the higher the APR over the interest rate offered, the higher the fees.

Other factors that affect APR are the loan size and the term of the loan. A mortgage with a 15 year term will have a higher APR than a 30 year mortgage, even if the rate and fees are the same. Also, a $100,000 mortgage will have a higher apr than a $200,000 mortgage, with the same rate and fees. Make sure the loan term and the loan sizes on the two different offers are the same so you can more accurately assess which one is right for you.

What are closing costs?

Each lender may have different costs, Closing costs or the fees applied to make the loan may consist of some or all of the following:

1. Settlement and or attorney fees
2. Underwriting fee
3. Pre-paid: property taxes, mortgage interest, homeowners insurance and private mortgage insurance
4. Loan origination fee
5. Appraisal fee
6. Credit report fee
7. Messenger fees
8. Title recording fee
9. Survey fee if needed
10. Title insurance
11. Payment to escrow account for real estate taxes and homeowners insurance if applicable
12. Documentation preparation fees

Can I roll my closing costs into the loan amount?

Most lenders will not allow you to roll in your closing costs when purchasing a new home. However, most will allow a roll in of closing costs when refinancing an existing mortgage.

What are escrows?

Escrows are the pre-payments of real estate taxes and homeowners insurance held in an escrow account, then paid annually on your behalf

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