Why should I not use APR to shop for a mortgage?

APRs are a valuable tool to consider as part of your mortgage shopping process. However, it should not be the only factor you consider because a lender can lower the APR by adding more upfront costs to the buyer.

While APRs can be a good comparison when only comparing rates, terms, and lender fees, our APRs do not reflect CapCenter's full savings because CapCenter waives or reduces many fees that are not typically calculated in the APR. We also showcase our base rates with low or zero closing costs while other lenders showcase rates with discount points. When choosing a lender, we recommend a comprehensive comparison that includes non-lender closing costs for a more holistic comparison.

Also, upfront costs on mortgages are not conveyed well in APRs because the APRs are calculated for the life of the loan (e.g. 30 years) and high upfront costs make a small dent on the APR of a long-term loan with a high balance especially when calculated across the full loan term. Since many home owners move or refinance before the full loan term, CapCenter offers loan products with zero or low upfront costs that offer more flexibility to shorter time horizons.