Is comparing Annual Percentage Rates (APR) the best way to decide which lender has the lowest mortgage rates?
Yes. The APR method takes fees associated with a mortgage transaction and quantifies them as a percentage. It then adds this percentage to the interest rate you’ll pay on your principal mortgage balance. As a result, an APR allows a consumer to shop various lenders side by side. For example, if lenders A and B are advertising the same rate, yet the APRs are different, you’ll be able to determine that one lender is charging more fees for the loan than the other.