How to Shop Mortgages

Meet with different lenders to find the best mortgage.
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Like marriage, a mortgage is a serious commitment for you and your partner. Shopping around before taking the big leap into home ownership increases your chances of finding a mortgage that fits your needs and budget. Requirements for securing a mortgage are stricter than in recent years, in part due to past problems with subprime lending. Knowing your financial standing as a couple will help you prepare for the mortgage shopping process. A couple with less-than-stellar credit might have more difficulty finding a decent mortgage interest rate, but shopping around will give you more options.

Step 1

Obtain a copy of each of your credit reports. Read over all of the information to determine if they are accurate before you apply for a mortgage. Report any inaccuracies to the appropriate credit agency to ensure that your credit report is complete and accurate for the best mortgage rates.

Step 2

Calculate the down payment you have available to go toward a home purchase. The amount of your down payment can affect the interest rate you get, so you'll want to know how much is available before you shop for a mortgage.

Step 3

Discuss your needs and preferences about the mortgage with your partner. Talk about the price range of your future home, the down payment, maximum monthly payments, and the terms you prefer in a mortgage. Write these points down as a reference as you shop for a mortgage.

Step 4

Call the bank or credit union where you currently keep your financial accounts, especially if you have a long history there. Ask about their mortgage options and application process.

Step 5

Expand your list of potential lenders to other banks, credit unions and mortgage companies in the area. Choosing a lender with a local office allows you to have face-to-face contact, but there are also online lenders to consider.

Step 6

Schedule appointments with each of the potential lenders, noting any financial information each lender requires you to bring. Bring your list of preferences and details so each potential lender can give you the most accurate rates for their mortgage options. Request a mortgage quote with the specific terms and down payment so you can evenly compare the different mortgage options from various lenders.

Step 7

Ask each potential lender for a copy of the details for the mortgage options, including the interest rate, down payment, terms, monthly payment, closing costs, fees, restrictions and the requirement of having private mortgage insurance -- an additional expense to consider if you don't have at least a 20-percent down payment.

Step 8

Review the details of each mortgage option side by side to determine which lender offers the best overall deal. Create a spreadsheet with all of the information for a quick view of all of the options.

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