Kick the Tires: Comparison Shop for Your New Home Mortgage

By Emily Kerr
Loan page Columnist

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Captain Kirk - or at least William Shatner - is currently on a television ad, learning to kick tires and make comparisons before he buys. At least in the ad the idea of comparison shopping seems to surprise him. But you wouldn't buy a car without test driving it. And you shouldn't settle on a home mortgage product without shopping around.

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Lenders often call mortgages "mortgage products" - they're commodities, much like cars or other items, and terms may be negotiable. Just because you find a term you don't like in a mortgage product doesn't mean that product can't be the best solution for your new home loan. On the other hand, just because some of the features are good doesn't mean the entire mortgage product will work for you.

Shopping for a New Home Loan with a Mortgage Broker

When you're shopping for a new home loan you may want to consider using the services of a mortgage broker. Brokers usually arrange transactions between lenders and the person looking for the new home loan, rather than lending money themselves. As a result, mortgage brokers have contacts with many different lenders and can find you the best rate available and give you a wide selection of mortgage products.

Some lending institutions are both lenders and brokers and the broker is not obligated to find you the best new home loan or mortgage product unless he has contracted with you as your agent. You also need to be certain who pays the mortgage broker's fee.

What to Ask When Shopping for a Mortgage Loan

When shopping for the best possible home loan, it's important to have all the information on costs that you can. Ask if the rate quoted is the lowest for the week and how much it has varied recently. Find out if the interest rate is fixed or variable, and if variable, how much it will go up if interest rates rise and whether it will go down automatically when interest rates are reduced.

It's your mortgage, and your new home. You need to find the best mortgage product for your situation. So boldly go, and ask every question you can think of while finding your new home loan.

Sources:

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About the Author

Emily Kerr is a freelance writer with over 425 articles published. She writes about everything from new home construction to new home loans and beyond.

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