Loan Amount (Principal): The amount you borrow. This is the amount plus interest that you must repay over the term of the loan.
Interest: Interest is the percentage of principal you pay to borrow. It’s the primary component of the APR, and is determined in large part by the current cost of borrowing in the economy and your creditworthiness.
Points (Prepaid Interest): Interest that you prepay at the closing. Each point is 1% of the loan amount. For example, on a $90,000 loan with two points, you’d prepay $1,800.
Fees: Fees include application fees, loan origination fees, and other initial costs imposed by the lender.
Term (Length of the Loan): The longer the term, the lower the monthly payments, but the more you’ll pay in total.
Rate: Over time, a lower interest rate will have the greatest impact on overall cost.