Applying for a home loan

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Mortgages: Home Loans on the Web

Buying a first home is an important milestone in anyone's life. But even if it's your fifth home purchase, the financial jargon and seemingly endless paperwork involved in getting a mortgage can overshadow the excitement of owning your new home. On the Web you'll be able to find resources that help you understand what a mortgage is and how it works; decide which type of mortgage works best for you; find a reputable lender; and even understand what happens after you get your loan. For a Spanish-language version of the Guide, click here.

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How does a mortgage work?

It would be nice if getting a mortgage were as simple as asking for one and then getting a check in ... read more »

Choosing the right type of mortgage

Choosing the right type of mortgage can be as important as choosing the right home. Instead of ... read more »

Applying for a home loan

Once you have found your dream home you want to be able to move in as quickly as possible; sometimes it's handy to get pre-approved for a loan to get the process moving before you even start your house hunting. Before you wander from bank to bank (or mortgage broker to mortgage broker) applying for home loans, take a look at the information available online to get an overview of what to expect from the mortgage process, to help you decide what kind of lender would suit your needs, and even where you can find the lowest interest rates.

Dulcinea's Insight

Loans from Internet-based providers can sometimes be offered at lower rates than those from brick-and-mortar banks because the Internet-only providers often have lower overhead costs.

Lots of private lenders (such as quickenloans.com) have tips and tools to help you choose a loan or lender, but know that ultimately the goal of these sites is to get you to borrow money from them, so be aware that they recommend themselves first. Most banks offer mortgages. Try looking at your bank's Web site to see if you can get a special rate or reduced closing costs as an existing customer.

Keep track of the rates and fees that are given to you by different lenders (using a spreadsheet or even a pad of paper); sometimes a lower interest rate, after additional fees, actually turns out to be a worse deal than a slightly higher interest rate with fewer fees. If you do the math yourself you'll be able to compare apples with apples to determine what is really the best mortgage for you.

Dulcinea's Picks

For help beginning the process ...

Ginnie Mae has a "Homeownership 101" section that helps you determine if you are ready to buy, what cash you need to get started, how to choose a mortgage, and an explanation of the people involved in the mortgage process. Ginnie Mae is a government-backed company that guarantees payment to investors for some mortgage-backed securities.

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RealEstateABC's "Mortgage Guide" gives you resources such as a checklist of things you need when you apply for a loan as well as articles such as "What is Missing in Mortgage Ads on Television?" The index of this guide is a little text-heavy, but take a moment to look through it and you'll surely find a helpful article or two.

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To know how your credit score is determined ...

Privacy Rights Clearinghouse has an article called "Your Credit Score: How It All Adds Up" that tells you what rights you have concerning your credit score, how your score is determined, and tips for improving your credit score.

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To help you choose a lender ...

The Federal Deposit Insurance Corporation (FDIC) has an online brochure called "Looking for the Best Mortgage" that will guide you through collecting cost and fee information from multiple providers. This gives a brief glossary of terms, explains fair lending, gives resources for learning about your credit score, and even has a "mortgage shopping worksheet" for you to fill out to help you compare mortgages.

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GovLoans.gov is a portal to information about government loans and opportunities to aid people in finding affordable housing. This site is especially useful for those with a low income or who belong to a group such as veterans, Native Americans, those in rural areas, or those that have experienced a natural disaster.

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HSH Associates helps you compare the rates of lenders in your area. Choose the type of loan (either "good credit" or "bad credit") and then you'll be directed to a page with the lenders nearby. Click on the name of a lender to see their current rates.

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To understand the difference between a bank and a mortgage broker ...

Bankrate has an article called "Banker or broker-which is better for your mortgage?" that helps you determine what kind of lender best suits your needs as a homebuyer.

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To find a broker ...

The National Association of Mortgage Brokers has a searchable directory of certified brokers. Search using your city and state (or search for a broker by name). Not sure what the different certifications mean? Check out the certification page to find out.

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For organizations that oversee fair lending practices ...

The Federal Reserve Board provides articles about fair lending practices and mortgages (scroll down the page to find them) such as "Interest-Only Mortgage Payments and Payment-Option ARMs: Are They for You?" and "Home Mortgages: Understanding the Process and Your Right to Fair Lending."

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The U.S. Department of Housing and Urban Development has an article called "Don't be a Victim of Loan Fraud" that explains what predatory lending is, how to be a smart consumer, and some common tactics used by predatory lenders.

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The Better Business Bureau provides a reliability report for a company of your choice when you search for the company's name in the search box. The reliability report lets you know what, if any, complaints have been filed with the BBB.

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