Thinking of getting your first mortgage, or wondering if you should refinance?

Mortgages are a competitive business. You can save yourself thousands of dollars by asking questions and comparing what each lender or broker has to offer.

We know: 1 Minute Lesson in Buying a Mortgage

The first and most important lesson is... You'd Better Shop Around.

Hereís what to know before you shop:

  1. How much money you want to borrow
  2. How much down payment you can afford.

Hereís what to ask EACH lender when you call.

  1. Ask for a list of the lenderís current INTEREST RATE and if that is the lowest rate for the day or week.
  2. Ask if the interest rate is FIXED or ADJUSTABLE. Fixed rates remain the same over the life of the loan, adjustable rates can change, altering your monthly payment.
  3. Ask about the TERM OF THE LOAN. Will you have to pay it back over 15 years or 30 years? Often, a shorter term loan means you make somewhat higher payments, but you pay off the loan more quickly and pay less in interest.
  4. Ask what the loanís ANNUAL PERCENTAGE RATE or APR is. This takes into account not just the interest rate, but also the points, broker fees and other credit charges, expressed as a yearly rate.
  5. Ask if there are any POINTS associated with the loan. Points are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate.
  6. Ask for a list of the FEES the lender is charging for the loan. Every lender should be able to tell you the approximate total of the fees. Many of these are negotiable.
  7. Ask what the MONTHLY PAYMENT will be.

Donít be afraid to make lots of call and ask lots of questions. Over time, youíll begin to understand the terms and make comparisons between lenders. Remember to ask about similar loans, such as a 15 year fixed loan with no points, or a 30 year fixed loan with 1 point. If you ask each lender about the same type of loan, youíll get a better idea about whoís offering the best deal.

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