When referring to mortgages, the acronym "APR" resents a defined term - "annual percentage rate" - according to the definition set forth in the glossary of terms provided by the Federal Home Loan Bank. Think of APR as the equivalent of actual cost at a fixed rate over the course of a year. Whether comparing true fixed rates or adjustable rates, at the end of the year, the total cost of all interest, fees and costs is the basis for comparing APR to the principal balanced owed.

Why quality matters: When comparing mortgage quotes, the lowest quote is not always the wisest choice. Customer service, lender reputation, and company stability also play an important role. For example, a stable company maintains a ready supply of cash available for loans to potential customers presenting a wide range of qualifications, while less qualified companies may advertise cheap fixed rates to only cherry pick among those few borrowers with perfect credit. When rates are rising, as in the current economy, initial fixed rate quotes will be slightly above those for ARMS, yet soon represent a true savings within 6 months.