Tips for Being a Smart Mortgage Shopper

Allison Beatty
LoanBiz Columnist


When applying for a mortgage, it pays to shop around. The interest rate and other terms can vary widely between various mortgage companies. Luckily, there are federal mortgage regulations that help borrowers see what they are getting.

How the Truth in Lending Act Protects You

The Truth in Lending Act is designed to protect consumers from unscrupulous lenders. It requires clear disclosure of the lending details for credit cards, mortgages and other financing. This helps you because:

• Financial documents have clear information about loan terms, rates and interest charges.
• You can more easily compare costs between mortgage companies.
• You can glance at the paperwork and get a summary of the costs.

Smart Mortgage Shopping

When evaluating loans from various mortgage companies, it pays to:

• Know what you are getting--A reputable mortgage lender will be happy to explain all the legal terms and commitments. Be wary of someone who tries to rush you through the paperwork.
• Shop. Shop. Shop.--Don't be satisfied with the first mortgage company you call. The process can be streamlined by using the Internet, as it makes shopping and comparing easy.
• Put emotion aside--When debating which mortgage to take, focus on the financial details and not the soaring ceilings and gourmet kitchen in the new house.

The Truth in Lending Act and other regulations provide a framework for mortgage companies in terms of how they present and disclose information. When shopping, however, you still are in charge of steering your own course. By being a smart shopper, you can find the best mortgage loan with the best terms for you.

Source
FDIC: Federal Deposit Insurance Corporation

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.