Mortgage lenders will sometimes advertise only “APR” fees and state, for example, “Fees in APR” presumably to help give you a true comparison of what your rate is actually costing you.  APR fees are fees that the lender is charging you which are not third party fees.   An appraisal and credit report are examples of third party fees and are therefore not “APR” fees.  Many lenders have $1,500-$1,900 in non-APR Fees in addition to the APR fees. Let’s say a lender is charging $1,000.00 in APR fees - this lender is making the $1,000.00 as additional profit and not using the costs to pay for third party fees associated with the loan. The higher the direct lender fees, the higher the APR.  When you see a rate close to the APR, this lender is not charging many fees that are going directly to the lender.   When you look at the rates for Commonwealth Mortgage, LLC, you will notice that our fixed rates and APR rates are exactly the same.  This is because we do not charge any APR fees which is an enormous competitive advantage and a cost savings to you.   Some lenders who try to be very competitive with fees will increase the rate by a quarter percent or more and then advertise that they are charging only $500.00 in closings costs or even no fees at all.  When shopping for mortgage rates, always ask what the rate is with typical closing costs (and how much those costs are) and what is the rate with no fees at all.   You may be surprised at how much higher the rate is to waive all costs. At Commonwealth Mortgage, LLC, our impressively low closing costs can be waived simply by adding one eight to the rate. If you find a lender that is charging you less fees, you can bet that the rate is higher.