Shopping for a Loan
When shopping for a home loan you need to do just that, “shop”. Contact several lending institutions – including banks, credit unions, mortgage companies, etc and find out from each lender the best loan you qualify for. Start by comparing the following items:
- The annual percentage rate (APR)
- Points and fees
- The terms of the loan
- Required monthly payment
- Balloon payments
- Prepayment penalties
- Whether the interest rate for the loan will increase if you default
- Whether the loan includes charge for any type of voluntary credit insurance
It is also a good idea to get from each lender a written Good Faith Estimate that details the charges and fees you will be responsible for at closing. While you are at it ask for a Truth in Lending Disclosure as well. It states the monthly payment, APR, along with other loan terms.
