Shopping for a mortgage can be confusing especially if it is the first time. A mortgage is necessary when buying a house if the purchaser does not have the full price of the house in cash.

The mortgage is a loan for the difference between the price of the house and the cash available for a down payment. If some care is taken at the beginning of the process, a fair and easy to repay mortgage can be achieved.

Get Help

Mortgages are an expensive long term commitment. They can be more or less expensive depending on the conditions. They will depend on the purchaser’s income, the length of time to repay the loan, how much down payment the purchaser can give and other things. A housing counselor or real estate attorney employed by the purchaser can give advice and review any documents to make sure they are getting a fair repayment policy. The U.S. Department of Housing and Urban Development’s website will have the names of counseling resources.

Compare Loans from Different Lenders

When shopping for a car, a consumer will get a price from several different dealers. The same is possible when shopping for a mortgage. Brokers look for a lender for the purchaser, they don’t lend the money. Lenders lend directly, but neither is responsible for getting the purchaser the best loan for their individual situation. The purchaser needs to ask several different brokers and lenders for the conditions they offer for a first home mortgage.

Be aware of Credit Ratings and Monthly Payments

Purchasers should know their financial position before shopping for a mortgage. They should know how much they can afford to spend each month to repay the loan, and see that they are able to continue making the payments for years. If a purchaser has a good credit rating, it is possible the interest rate for the mortgage loan may be less. Credit reports should be checked to see if all the information is accurate.

Know exactly how much it will Cost

Never accept the first loan offered. Always have one or two other possibilities with which to compare. Loans have different costs at different times even for the same person. Ask about additional fees including redemption penalties. To change the lender once the mortgage is finalized will cost a fee. If the lender is not clear about this fee, it is better to find another lender.

Know the Features of the Loan

Mortgages have a variety of features that will affect the cost of the loan. Interest rates can be fixed or adjustable, there may be a penalty for repaying the loan early, and some loans have a large payment at the end.

When shopping for a mortgage it is good to have a mortgage shopping worksheet to easily compare different features of the mortgages being researched. This worksheet can be found at the Federal Reserve website.

If knowledge is power, watch this video “for your information”

Mortgage Servicers´ Secret
The secret mortgage servicers don´t want you to know is they can make MORE money off of homeowners when they keep your loan in default. A former employee of loan servicer EMC tells the inside story why so many people can´t get their loan out of default.