Basics When you are comparing mortgage offers from different lenders you will have many different loan factors to consider.
This may include:

• loan amount
• loan term
• interest rate
• closing costs

It can be hard to compare just the interest rate between two different offers.
You need to factor in the closing costs of the loan to figure out your true costs for the loan.
For example, you may have two different offers:

• loan size of $300,000 with $10,000 in closing costs at 5%
• loan size of $300,000 with $1,000 in closing costs at 5.
  2%

How do you compare these? Which one will cost you less over time? The annual percentage rate is your interest rate adjusted for these closing costs.
It should help give you a better idea of what the true cost of the offer is.
A mortgage calculator will help you factor in closing costs, including:

• Mortgage Insurance Premium
• Interest for days X $ per day
• Wire Transfer Fee
• Underwriting Fee
• Processing Fee
• Tax Related Service Fee
• Mortgage Broker Fee
• Lender's Inspection Fee
• Loan Discount
• Loan Origination Fee
• Attorney Fees
• Notary Fees
• Document Preparation Fee
• Closing or Escrow Fee
• Other Closing Costs

You can take into account these expenses to determine more closely your real costs with a mortgage offer.
There are many free mortgage calculators available online to help you.