What does APR stand for in mortgage lending?

The correct answer is Annual Percentage Rate, commonly abbreviated as APR. In mortgage lending, APR is a critical figure that represents the total cost of borrowing on a loan over a year, expressed as a percentage. This includes not only the interest rate but also any additional costs or fees that are associated with obtaining the mortgage, such as loan origination fees or closing costs.

Understanding APR is essential for borrowers because it allows them to compare different mortgage offers more effectively. By examining the APR, borrowers can assess how much they will actually pay for the loan over its lifetime, rather than just focusing on the nominal interest rate. This comprehensive view helps in making informed decisions about which mortgage product best fits their financial situation.

In contrast, terms like "Annual Payment Rate," "Authorized Payment Rate," and "Averaged Payment Rate" do not accurately reflect the essential definitions and implications of APR in the context of mortgage lending. They either misrepresent the concept or do not correspond to standard terminology used in the industry. Thus, Annual Percentage Rate is the term that encapsulates the complete cost of a loan, making it the precise and relevant answer.