So you've heard that interest rates are at all-time historic lows, and now you're shopping for the right lender to refinance your home. Smart move.

So that means you just look for the lowest interest rate, right?

Wrong.

Sure, low interest rates are a good, good thing. But they certainly don't tell the whole story when you're comparing loans. In fact, judging loans by interest rates alone can be downright misleading. If you really want to do an apples-to-apples comparison, you need to evaluate loans by the Annual Percentage Rate, or APR.

What's the difference between Interest Rate and APR?

When you see a mortgage loan advertised, you will see two numbers. The first, such as "3.50%" is the "simple" interest rate. The simple interest rate is the percentage of the loan amount that a lender charges to borrow the money. The second number you will see has the letters "APR" after it, such as 3.67 APR. APR stands for Annual Percentage Rate. The APR reveals the true interest rate you are paying. It includes any points, fees, and other amounts the lender requires you to pay as part of the loan process. These costs, which can total many thousands of dollars, may be paid by you in advance, or the lender might add them into the loan total. So, you end up paying interest on those amounts as well as the original loan amount. So, when you see an advertised interest rate that's significantly lower than its accompanying APR, you know that loan is loaded with fees and points.

So do yourself a favor and ignore "rates" when you're shopping for a loan--it's the APR that's the real measure of a lender. And, the best case scenario is when the rate and APR are the same, which means you are paying absolutely no closing costs or fees!

Lenders must legally provide their APR.

In 1968 the federal government passed "The Truth in Lending Act," which requires lenders to prominently advertise their APR in conjunction with their simple interest rate. This prevents less scrupulous lenders from touting low rates to lure borrowers, while at the same time hiding fees. For you, it means you get a real idea of which lender is truly going to save you more money.

APR really tells you who has "no fee" loans.

This is where I get to tell you how proud I am of CashCall Mortgage. Because in our advertising, our rate and APR is the same--and that means we offer a truly "no fee" loan. Go ahead and compare the APRs of different lenders for yourself. And when you see that CashCall Mortgage is better, feel free to call one of our loan advisors at 866-590-CASH.

Marc Dooley is the Chief Marketing Officer for CashCall, Inc.

CashCall Mortgage specializes in low interest mortgage loans and home refinancing for borrowers with good credit. Founded by the people who created DiTech, one of the first direct-to-consumers mortgage companies in 1995, CashCall Mortgage has streamlined the application and lending process, reducing their own costs and passing these savings on to customers by undercutting banks and other lenders with lower interest rates and no application fees, deposits or points. CashCall Mortgage offers a variety of products such as 10, 15, and 30-year fixed rate loans, FHA Loans, as well as a 125% Second Mortgage, allowing you to borrow up to 125% the value of your home. www.cashcallmortgage.com