To put it simply, the mortgage rate is the rate of interest charged on a mortgage. In other words, it is the cost involved in borrowing money for your loan. Think of it as the base cost. Mortgage rates differ from the annual percentage rate (APR). The mortgage rate describes the loan interest only, while APR includes any other costs or fees charged by the lender. The US Government requires mortgage lenders to provide their APR through the Truth in Lending Act. It allows consumers to have an apples to apples comparison of what a loan will cost them through different lenders. Keep in mind that lenders may calculate APR differently and APR also assumes you will hold the loan for its full amortization so it is still important to carefully compare and consider when selecting a loan.
There is no way around credit inquiries when applying for a mortgage. Because credit score is an important determinant that demonstrates a lender’s risk, the fact is your credit will be pulled. And, furthermore, the system used to determine that score covers credit inquiries of all different types and taking a hit for line of credit requests just makes sense, whether we like it or not. The great news is that a little knowledge about the policy and the real effect mortgage shopping has on your credit score provides a great deal of freedom and comfort that helps ensure you make the right mortgage decision.

Understanding their policy and how to take advantage of it can mean the difference between a great mortgage and a mortgage you are just stuck with. When you are ready to mortgage shop, give yourself two weeks to apply with as many lenders as you would like to. The reason is the bureaus will reduce your score by five points for the first inquiry; however any additional inquiries for mortgage applications will not affect your score for a period of 14 days. Regardless of whether you apply with five lenders or fifty, as long as you are within that window you will only be hit for those first five points.