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Shop Until You Drop: Choosing the Right Home Mortgage Loan
By Karen Lawson
CMR Columnist
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You need the perfect pair of shoes for a big event, and you're in a panic. You spend days searching the mall, and trying on countless pairs of trendy shoes. You might buy several pairs, and return the ones you don't want once you've chosen a pair. Unfortunately, you won't have that option when shopping for a mortgage. In your excitement about buying your first home, it's important to shop carefully for the home loan that best suits your needs.
Doing Your Homework
A home mortgage loan is likely the largest expense in your household budget, and it will be secured by your home. It's a good idea to shop for your home loan before shopping for a home. This allows you time to compare features and benefits of several loan products.
Ask Questions and More Questions
There are many variables in shopping for a home mortgage loan. Before agreeing to anything, you will want to ask plenty of questions. The Federal Trade Commission, which governs fair lending practices, provides tips like these for homebuyers seeking a home mortgage loan:
- Consider several loan types and match them to your needs and preferences
- Ask questions about terms, rates, and benefits of each loan
- Compare loan terms, fees, costs, and annual percentage rates (APR)
- Negotiate fees and costs
- Understand how and when payments and rates will adjust on adjustable rate loans
- Check newspapers or websites daily to track current mortgage rates
- Use worksheets and payment calculators (available online)
As with any purchase, you are the customer, and it's important to choose a lender that answers your questions, takes time to make you comfortable, and offers the home mortgage product that works best for you.
Sources
Federal Trade Commission
About the Author
Karen Lawson is a freelance writer with fifteen years of experience in mortgage lending. She earned an MA degree in English at the University of Nevada, Reno.
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