APR is the key to comparing multiple loan offers.

What is the APR and why is it so important?

The APR or annual percentage rate allows you to make true comparisons of the actual costs associated with each loan. It is expressed as an annual percentage rate—hence its name. The APR will be slightly higher than the note rate the lender is charging because it includes all (or most) of the other fees that the loan carries with it, such as the origination fee, points, pmi premiums, etc.

What is the difference between the interest rate and the A.P.R.?

You'll see an interest rate and an Annual Percentage Rate (A.P.R.) for each mortgage loan you see advertised. The easy answer to "why" is that federal law requires the lender to tell you both. The A.P.R. is a tool for comparing different loans, which will include different interest rates but also different points and other terms. The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.

What does that mean to you?

When gathering information from several lenders make sure they are quoting not just the interest rate but the APR, this will protect you from last minute surprises.