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When you are preparing to apply for a mortgage, whether it is for a new home, refinancing, or a home equity loan, there are a number of things you can do to make the process easier. First, you will want to obtain information from several different mortgage lenders. There are many different types of lenders including thrift institutions, commercial banks, mortgage companies, and credit unions. You will want to speak with a few different lenders to compare quotes and try to find the best price available. You can also get a home loan from a broker, which is often difficult to distinguish from a lender. A mortgage broker will arrange transactions rather than actually lending the money. A mortgage broker will find a lender for you. The more mortgage lenders your broker has contact with, the more lenders, loan types, and terms you will have to choose from. Brokers can contact several lenders regarding your application for a loan, but they are not required to offer you the best deal. Brokers are, however, required to find you the best deal if you have a contract with them and they are acting as an agent on your behalf. You may want to consult with several mortgage brokers to find the one that is best for you.

Some financial institutions act as lenders and brokers. It is important that you find out whether a broker will be involved with your application for a loan because brokers are usually paid an additional fee. This fee is not typically included in the origination or other fees paid to a lender. The broker can be paid in points, at closing, or as an addition to your interest rate, or both. Make sure that you find out how your broker will be compensated, so you can negotiate with them just as you would with a lender.

When applying for a mortgage, it is important to obtain as much information as possible so you can compare pricing and make an informed decision. When consulting with different mortgage lenders and brokers, be sure to inquire about the same loan amount, loan term, and type of loan so you can compare the costs easily. The monthly payment and interest rate are just two of the many, many details you will want to know when comparing loan offers. Lenders and brokers should be able to give you an estimate of its fees, most of which are negotiable. Common fees include loan origination, underwriting, broker, transaction, settlement, and closing costs. Lenders generally require a twenty percent down payment, but some will accept as little as five percent. With a smaller down payment, you will probably be required to purchase private mortgage insurance to protect the lender in the event of failure to pay. If you are using a government program for your loan, the required down payment is very low.

Before deciding on a lender, broker, or loan, make sure that you have done your research and thoroughly evaluated your options. Once you have talked to several lenders and brokers, you can begin negotiating costs. Your local newspaper is a great place to start looking for information on lenders operating in your area.

When shopping for a lender or mortgage broker, it is important to know what questions to ask. If you know what to ask, you will be in a better position to make a decision. Before deciding on a lender or a broker, please see the list of questions below:

• Ask for a list of current mortgage interest rates and whether the quoted rates are the lowest for the current day, or the lowest for the current week.
• Ask whether the rate is fixed or adjustable.
• If the quoted rate is an adjustable-rate, ask about the potential variation of your loan payment, and whether or not your loan payment will decrease when rates go down.
• Ask about the loan's annual percentage rate (APR), and how points, broker fees, and other fees will affect it.
• Ask for points to be quoted to you as a dollar amount instead of the number of points, so you can calculate the amount you will be required to pay.
• Ask what each fee includes, as some fees are stated as a total of several items.
• If you do not understand a certain fee, ask for a complete explanation of it.
• Ask what each fee includes, as some fees are stated as a total of several items.
• If you do not understand a certain fee, ask for a complete explanation of it.
• Ask what percentage the lender requires as a down payment.
• Ask what you will be obligated to do to verify that the funding for your down payment is available.
• Ask about special programs that the lender offers.
• If you are required to obtain private mortgage insurance (PMI), ask what the total cost of that insurance will be.
• Ask how much your monthly payment will be with the PMI premium included.
• Ask how long you will be required to carry the private mortgage insurance.