One of the most important things you can do when buying a home is to compare mortgage loans. Mortgage loans determine the amount of your monthly payments as well as the amount you put down, and how much interest you will incur over the life of the loan. To make things simpler, we suggest you ask each lender the following questions:
• What is the loan’s interest rate?
• Will I be charged points?
• What are the closing costs and all other fees?
• What is the annual percentage rate, or APR – the rate you will pay per year for all the costs associated with the loan?
• Is there a pre-payment penalty?
• How is the loan amortized, meaning how quickly is the principal paid off?