Mortgages

	Ask each lender and broker for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week.
	Ask whether the rate is fixed or adjustable. Keep in mind that when interest rates for adjustable-rate loans go up, generally so does the monthly payment.
	If the rate quoted is for an adjustable-rate loan, ask how your rate and loan payment will vary, including whether your loan payment will be reduced when rates go down.
	Ask about the loan’s annual percentage rate (APR). The APR takes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate.

	Check your local newspaper for information about rates and points currently being offered.
	Ask for points to be quoted to you as a dollar amount--rather than just as the number of points--so that you will actually know how much you will have to pay.

	Ask what each fee includes. Several items may be lumped into one fee.
	Ask for an explanation of any fee you do not understand. Some common fees associated with a home loan closing are listed on the Mortgage Shopping Worksheet in this brochure.

	Ask about the lender’s requirements for a down payment, including what you need to do to verify that funds for your down payment are available.
	Ask your lender about special programs it may offer.

	Ask what the total cost of the insurance will be.
	Ask how much your monthly payment will be when including the PMI premium.
	Ask how long you will be required to carry PMI.

	Lender 1	Lender 2
Name of Lender:	___	___
Name of Contact:	___	___
Date of Contact:	___	___
Mortgage Amount:	___	___

	mortgage 1	mortgage 2	mortgage 1	mortgage 2
Basic Information on the Loans Type of Mortgage: fixed rate, adjustable rate, conventional, FHA, other? If adjustable, see below	___	___	___	___
Minimum down payment required	___	___	___	___
Loan term (length of loan)	___	___	___	___
Contract interest rate	___	___	___	___
Annual percentage rate (APR)	___	___	___	___
Points (may be called loan discount points)	___	___	___	___
Monthly Private Mortgage Insurance (PMI) premiums	___	___	___	___
How long must you keep PMI?	___	___	___	___
Estimated monthly escrow for taxes and hazard insurance	___	___	___	___
Estimated monthly payment (Principal, Interest, Taxes, Insurance, PMI)	___	___	___	___
Fees Different institutions may have different names for some fees and may charge different fees. We have listed some typical fees you may see on loan documents. Application fee or Loan processing fee	___	___	___	___
Origination fee or Underwriting fee	___	___	___	___
Lender fee or Funding fee	___	___	___	___
Appraisal fee	___	___	___	___
Attorney fees	___	___	___	___
Document preparation and recording fees	___	___	___	___
Broker fees (may be quoted as points, origination fees, or interest rate add-on)	___	___	___	___
Credit report fee	___	___	___	___
Other fees	___	___	___	___
Other Costs at Closing/Settlement Title search/Title insurance For lender	___	___	___	___
For you	___	___	___	___
Estimated prepaid amounts for interest, taxes, hazard insurance, payments to escrow	___	___	___	___
State and local taxes, stamp taxes, transfer taxes	___	___	___	___
Flood determination	___	___	___	___
Prepaid Private Mortgage Insurance (PMI)	___	___	___	___
Surveys and home inspections	___	___	___	___
Total Fees and Other Closing/Settlement Cost Estimates	___	___	___	___

	Lender 1	Lender 2
Name of Lender:

	mortgage 1	mortgage 2	mortgage 1	mortgage 2
Other Questions and Considerations about the Loan Are any of the fees or costs waivable?	___	___	___	___
Prepayment penalties Is there a prepayment penalty?	___	___	___	___
If so, how much is it?	___	___	___	___
How long does the penalty period last? (for example, 3 years? 5 years?)	___	___	___	___
Are extra principal payments allowed?	___	___	___	___
Lock-ins Is the lock-in agreement in writing?	___	___	___	___
Is there a fee to lock-in?	___	___	___	___
When does the lock-in occur—at application, approval, or another time?	___	___	___	___
How long will the lock-in last?	___	___	___	___
If the rate drops before closing, can you lock-in at a lower rate?	___	___	___	___
If the loan is an adjustable rate mortgage: What is the initial rate?	___	___	___	___
What is the maximum the rate could be next year?	___	___	___	___
What are the rate and payment caps each year and over the life of the loan?	___	___	___	___
What is the frequency of rate change and of any changes to the monthly payment?	___	___	___	___
What is the index that the lender will use?	___	___	___	___
What margin will the lender add to the index?	___	___	___	___
Credit life insurance Does the monthly amount quoted to you include a charge for credit life insurance?	___	___	___	___
If so, does the lender require credit life insurance as a condition of the loan?	___	___	___	___
How much does the credit life insurance cost?	___	___	___	___
How much lower would your monthly payment be without the credit life insurance?	___	___	___	___
If the lender does not require credit life insurance, and you still want to buy it, what rates can you get from other insurance providers?	___	___	___	___

Mortgages

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This collection of personal financial information is directed to works for a living. Everyone needs to know more about financial matters. The SOURCE for much of this information is the GSA Consumer Information Catalog published by the Federal Citizen Information Center.

ESPAÑOL

Obtain information from several lenders Obtain all important cost information Obtain the best deal that you can Remember: Shop, compare, negotiate Fair lending is required by law

Credit problems? Glossary Mortgage shopping worksheet For more information

Obtain Information from Several Lenders

Obtain All Important Cost Information

Rates

Ask each lender and broker for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week.

Ask whether the rate is fixed or adjustable. Keep in mind that when interest rates for adjustable-rate loans go up, generally so does the monthly payment.

If the rate quoted is for an adjustable-rate loan, ask how your rate and loan payment will vary, including whether your loan payment will be reduced when rates go down.

Ask about the loan’s annual percentage rate (APR). The APR takes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate.

Points Points are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate.

Check your local newspaper for information about rates and points currently being offered.

Ask for points to be quoted to you as a dollar amount--rather than just as the number of points--so that you will actually know how much you will have to pay.

Ask what each fee includes. Several items may be lumped into one fee.

Ask for an explanation of any fee you do not understand. Some common fees associated with a home loan closing are listed on the Mortgage Shopping Worksheet in this brochure.

Ask about the lender’s requirements for a down payment, including what you need to do to verify that funds for your down payment are available.

Ask your lender about special programs it may offer.

If PMI is required for your loan,

Ask what the total cost of the insurance will be.

Ask how much your monthly payment will be when including the PMI premium.

Ask how long you will be required to carry PMI.

Obtain the Best Deal That You Can

Remember: Shop, Compare, Negotiate

Fair Lending Is Required by Law

The Fair Housing Act prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status, or national origin.

Under these laws, a consumer cannot be refused a loan based on these characteristics nor be charged more for a loan or offered less favorable terms based on such characteristics.

Credit Problems? Still Shop, Compare, and Negotiate

Whether you have credit problems or not, it’s a good idea to review your credit report for accuracy and completeness before you apply for a loan. To order a copy of your credit report, contact: Equifax: (800) 685-1111 TransUnion: (800) 888-4213 Experian: (888) 397-3742

Glossary

Annual percentage rate (APR) is the cost of credit expressed as a yearly rate. The APR includes the interest rate, points, broker fees, and certain other credit charges that the borrower is required to pay.

Conventional loans are mortgage loans other than those insured or guaranteed by a government agency such as the FHA (Federal Housing Administration), the VA (Veterans Administration), or the Rural Development Services (formerly know as Farmers Home Administration, or FmHA).

Escrow is the holding of money or documents by a neutral third party prior to closing. It can also be an account held by the lender (or servicer) into which a homeowner pays money for taxes and insurance.

Fixed-rate loans generally have repayment terms of 15, 20, or 30 years. Both the interest rate and the monthly payments (for principal and interest) stay the same during the life of the loan.

The interest rate is the cost of borrowing money expressed as a percentage rate. Interest rates can change because of market conditions.

Loan origination fees are fees charged by the lender for processing the loan and are often expressed as a percentage of the loan amount.

Lock-in refers to a written agreement guaranteeing a home buyer a specific interest rate on a home loan provided that the loan is closed within a certain period of time, such as 60 or 90 days. Often the agreement also specifies the number of points to be paid at closing.

A mortgage is a document signed by a borrower when a home loan is made that gives the lender a right to take possession of the property if the borrower fails to pay off the loan.

Overages are the difference between the lowest available price and any higher price that the home buyer agrees to pay for the loan. Loan officers and brokers are often allowed to keep some or all of this difference as extra compensation.

Points are fees paid to the lender for the loan. One point equals 1 percent of the loan amount. Points are usually paid in cash at closing. In some cases, the money needed to pay points can be borrowed, but doing so will increase the loan amount and the total costs.

Thrift institution is a general term for savings banks and savings and loan associations.

Mortgage Shopping Worksheet File for Printing Worksheet (12KB PDF)

Lender 1

Lender 2

Name of Lender:

___

___

Name of Contact:

___

___

Date of Contact:

___

___

Mortgage Amount:

___

___

mortgage 1

mortgage 2

mortgage 1

mortgage 2

Basic Information on the Loans Type of Mortgage: fixed rate, adjustable rate, conventional, FHA, other? If adjustable, see below

___

___

___

___

Minimum down payment required

___

___

___

___

Loan term (length of loan)

___

___

___

___

Contract interest rate

___

___

Obtain information from several lenders
Obtain all important cost information
Obtain the best deal that you can
Remember: Shop, compare, negotiate
Fair lending is required by law

Credit problems?
Glossary
Mortgage shopping worksheet
For more information

Points

Points are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate.

Whether you have credit problems or not, it’s a good idea to review your credit report for accuracy and completeness before you apply for a loan. To order a copy of your credit report, contact:

Equifax: (800) 685-1111
TransUnion: (800) 888-4213
Experian: (888) 397-3742

Basic Information on the Loans
Type of Mortgage: fixed rate, adjustable rate, conventional, FHA, other? If adjustable, see below