X

Think you know a bit about mortgages? Why not take our 10-question mortgage quiz and test your knowledge?

Think you know a bit about mortgages? Why not take our 10-question mortgage quiz and test your knowledge?

What do the acronyms APR, FRM and ARM mean?

HSH Editors Image

APR stands for Annual Percentage Rate. This number includes some of the various costs of obtaining a mortgage loan and converts them into a single value in order to help you comparison shop for your loan. However, it is a misunderstood and often misleading number and can actually cause more confusion than it alleviates. Due to what is a rather flawed calculation, many ARMs have APRs far less than their actual contract interest rates, when it should be the other way around.

FRM and ARM are simple -- Fixed Rate Mortgage (FRM) and Adjustable Rate Mortgage (ARM) -- two basic types of mortgages. FRMs have interest rates which never change, while ARMs have rates that can change anywhere from one time over a 30-year term to more than 360 times.

To learn more about the acronyms and terms used in real estate and mortgage market, check out HSH's Glossary of Mortgage Terms.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
Please enter a question.
Please enter name.
Please enter email.
Captcha code invalid
Q: How best to consolidate credit card debt?
SEP 24, 2024
A:

A lower-cost alternative might be to obtain a home equity line of credit or even an HECM.

Read More
Q: The index which governs my ARM disappeared. What happens now?
SEP 09, 2024
A:

When an index disappears, it will be replaced with another indicator.

Read More
Q: How should I pay my mortgage closing costs?
SEP 04, 2024
A:

Generally, there are three ways to approach the issue. Each option has different effects on your mortgage cost over time.

Read More
Add to Homescreen?
X
X
Install this web app on your phone :tap and then Add to homescreen