Finding the Right Lender

• There are thousands of lenders out there, each offering their own package of terms and rates. You want to avoid the scam lenders which nail you with hidden fees and complex terms. Walk away from any mortgage that assesses a fee if you pay the loan off early--this can cost you thousands of dollars. Don't talk with any lender encouraging you to cite a business purpose as part of your reason for getting the loan. This constitutes fraud and can get you into serious legal trouble if caught. Also steer clear of any loan lender that offers "no cost to you." This means the closing costs are added onto the loan amount. Lenders hope that what sounds like a good deal lulls you to sleep so that you don't realize you're getting charged excessive amounts onto your mortgage.
  
  

Locking in on a loan

• When you think you've found the mortgage loan you want, ask for a good faith estimate. Lending companies are required to provide you what they expect to be your total cost with the loan, costs and loan terms and fees included. This will be presented as both a total number and your monthly payment cost. If you're happy with the numbers, proceed to take a look at the mortgage note, and make sure you understand every section detailed in the loan agreement. Take your time going over it. You may want to run it by a real estate lawyer if you find it difficult to read and interpret legal contracts. Finally, look over the fees charged to you by the lender.
  This is where it is helpful to have received lender fee estimates from other lenders: Compare the fees charged by your potential lender to other lenders you have talked with. If their fees are higher, ask why there is a difference. Ask them why they can't match the fees of another lender.
  If you are unsatisfied with their reasoning or offer, walk away. They may pursue you, or you can mull over their offer while taking a look at other loan offers.
  This winding path to a mortgage bears another warning: Don't always believe a mortgage lender's prediction of receiving a quick loan. They're often wrong, and if they're not wrong, it might be because they are hoping to prey on your impulses and live off high fees.