As fh4rent pointed out, one point is the same as one percent. However, it doesn’t necessarily have to be interest on a loan. It could be referring to commissions, or fees, or other related costs that may or may not have anything to do with a loan.
Think of this way… All cows are animals, but not all animals are cows.
In other words...All points are percentages, but not all percentages are interest.
Does that make sense? Or, did I just confuse the issue?
Quote:
On 2006-06-29 09:18, mcole wrote:
Rsalazar,
Yes, there is a difference. A big difference.
As fh4rent pointed out, one point is the same as one percent. However, it doesn’t necessarily have to be interest on a loan. It could be referring to commissions, or fees, or other related costs that may or may not have anything to do with a loan.
Think of this way… All cows are animals, but not all animals are cows.
In other words...All points are percentages, but not all percentages are interest.
Does that make sense? Or, did I just confuse the issue?
if I can ask further in depth...
what is the difference b/w interest rate and APR?
If you are paying cash for the property then the percentages used in financing the peoperty do not matter. If your credit is good enough or your property is producing enough income then it would make a difference.
Since you are paying cash and are just curious, the interest ratesare the percentage of the loan charged to you over the term of the loan. The Anual Percentage Rate (APR) includes the points and other costs included with the loan.
If you have cash and good enough credit you can purchase more property using financing.
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So if you pay full cash deals on property, there is no real difference?
Rsalazar,
Yes, there is a difference. A big difference.
As fh4rent pointed out, one point is the same as one percent. However, it doesn’t necessarily have to be interest on a loan. It could be referring to commissions, or fees, or other related costs that may or may not have anything to do with a loan.
Think of this way… All cows are animals, but not all animals are cows.
In other words...All points are percentages, but not all percentages are interest.
Does that make sense? Or, did I just confuse the issue?
Getting there. (I think!) So be careful if you plan to rent out the place because the points affect the rate of home purchase?! (I think)
Quote:
On 2006-06-29 09:18, mcole wrote:
Rsalazar,
Yes, there is a difference. A big difference.
As fh4rent pointed out, one point is the same as one percent. However, it doesn’t necessarily have to be interest on a loan. It could be referring to commissions, or fees, or other related costs that may or may not have anything to do with a loan.
Think of this way… All cows are animals, but not all animals are cows.
In other words...All points are percentages, but not all percentages are interest.
Does that make sense? Or, did I just confuse the issue?
if I can ask further in depth...
what is the difference b/w interest rate and APR?
If you are paying cash for the property then the percentages used in financing the peoperty do not matter. If your credit is good enough or your property is producing enough income then it would make a difference.
Since you are paying cash and are just curious, the interest ratesare the percentage of the loan charged to you over the term of the loan. The Anual Percentage Rate (APR) includes the points and other costs included with the loan.
If you have cash and good enough credit you can purchase more property using financing.