Shopping around
for a home loan
or mortgage will
help you to get the best
financing deal. A mort-
gage—whether it’s a home
purchase, a refinancing, or
a home equity loan—is a
product, just like a car, so
the price and terms may be
negotiable. You’ll want to
compare all the costs in-
volved in obtaining a mort-
gage. Shopping, comparing,
and negotiating may save
you thousands of dollars.
interest rate, or both. You should ask
each broker you work with how he or
she will be compensated so that you
can compare the different fees. Be
prepared to negotiate with the brokers
as well as the lenders.
Obtain All Important
Cost Information
Be sure to get information about
mortgages from several lenders or
brokers. Know how much of a down
payment you can afford, and find out
all the costs involved in the loan.
Knowing just the amount of the
monthly payment or the interest rate is
not enough. Ask for information about
the same loan amount, loan term, and
type of loan so that you can compare
the information. The following informa-
tion is important to get from each
lender and broker:
Rates
• Ask each lender and broker for a
list of its current mortgage interest
rates and whether the rates being
quoted are the lowest for that day
or week.
• Ask whether the rate is fixed or
adjustable. Keep in mind that when
interest rates for adjustable-rate
loans go up, generally so does the
monthly payment.
•
If the rate quoted is for an
adjustable-rate loan, ask how your
rate and loan payment will vary,
including whether your loan pay-
ment will be reduced when rates go
down.
Obtain Information
from Several Lenders
Home loans are available from several
types of lenders—thrift institutions*,
commercial banks, mortgage compa-
nies, and credit unions. Different
lenders may quote you different
prices, so you should contact several
lenders to make sure you’re getting
the best price. You can also get a
home loan through a mortgage broker.
Brokers arrange transactions rather
than lending money directly; in other
words, they find a lender for you. A