A.P.R. is Worthless

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The Annualized Percentage Rate APR is an economic measurement designed by politicians.

It was intended to provide the mortgage borrower with a simple way to compare the real costs of different mortgages. For example, is the low interest rate high points approach better than the High interest rate lower points? Unfortunately the way it was designed is badly flawed. It not only fails in this primary goal. it also allows the numbers to be manipulated in such a way that the borrower can take the low APR option but end up paying much more for the loan, and losing some tax benefits.

A detailed explanation of the problems with this legistlation would take another couple of pages, but if anyone is really interested drop me an e-mail and I’ll happily give you the gory details.

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