How to Shop for a Home Mortgage

Shopping for a home mortgage involves a lot of legwork - you should consider many different lenders, rates and terms.

Instructions

Difficulty: Moderately challenging

Things You’ll Need:

• Phone Book
• Sunday Newspapers
• Real Estate Agents
• Real Estate Brokers
• Notebooks
• Pens
• Online Mortgage/finance Services

1. Compile a list of mortgage lenders from your local phone book.
2. Contact a mortgage reporting service, such as HSH Associates, to see if you can get additional information on mortgages in your area.
3. Check the business section of your Sunday paper. Newspapers usually have listings of available mortgages in your area.
4. Contact the lenders and create a comparison chart listing lender name, current rate on the mortgage you are looking for and how many points you might have to pay for that mortgage.
5. Consider hiring a mortgage broker to help you shop around.

Tips & Warnings

• Rates can change quickly, so try to make as many calls as you can as quickly as possible if you are ready to move on your mortgage.
• Don't rely solely on names of institutions you are familiar with. While they may give you a "warm-and-fuzzy" feeling, remember that they will probably sell your mortgage after it has closed.
• See if your real estate agent has a computerized loan origination (CLO) system. These display different rates and lenders in your area.
• While CLO systems may be a good idea, know that agents are not required to maintain a minimum number of lenders on the system.
• If your agent has a CLO system, ask how much you will be charged for using it. Current law does not limit how much agents can charge for this service.