Real Estate

Linda Stern
Before shopping for a house, shop for a mortgage!

If you're buying a home, shop for a loan first. Once you put an offer on a house, you may have little more than a week to get a loan. You'll want more time than that to decide which product you want, get an estimate on how much you'd qualify to borrow, and locate the four or five cheapest lenders. Do these things ahead of time. Then when you locate the house you want, you can update the quotes and apply for the loan.

Get the right loan: A poor choice of fixed versus variable, long versus short, etc., can cost you more than the extra fees or percentage points you might pay to get the right loan.

Do your homework: With so much of your money at stake, you should leave no stone unturned in your hunt for a new or replacement loan. You can get mortgages from banks, savings and loans (thrifts), mortgage brokers, mortgage banks, mortgage-finance companies, local mortgage brokers, and credit unions. There's no easy rule for which one will be better, so check them all.

Go online: The Internet is home to any number of mortgage calculators and shopping services. You can tally exactly what you'll qualify for, compare various loans, and even apply online at some sites. Some useful sites are: E-LOAN, GetSmart, HSH Associates, Lending Tree and Quicken Loans.

Limit add-on costs: Lenders must give you a good-faith estimate of your loan's cost when you first apply for it, but they might not include all the fees they may charge. These fees can add up. Try to get a copy of your closing statement one day before settlement, so you have time to dispute annoyances such as photocopying charges and long-distance telephone fees.

Most lenders charge:

- Appraisal fees averaging $292
- Credit-reporting fees averaging $436
- Document-preparation fees averaging $165
- Application fees, when they're charged, average $218.

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