Find the Best Mortgage For You

Points are up-front interest charges paid to the lender that allow you to lower your interest rate. Each point is essentially prepaid interest and equals one percent of the total loan amount. If you plan to stay in your home for several years, the amount you save with a reduced interest rate increases every year.

The two primary components of mortgage payments are principal and interest. Many lenders also attach real estate taxes and homeowner's insurance to the payments.

When a mortgage choice has been finalized, complete a loan application. The application asks for information concerning income, employment, assets and liabilities. The lender will ask for documentation to verify this information. A professional appraisal will be ordered to determine the home's market value.

The lender evaluates your application and completes the appraisal between two and six weeks. Because interest rates might fluctuate during the appraisal, ask the lender to secure a specific interest rate for a certain period of time. Once a loan decision is made, the lender will notify you of the outcome and a closing date will be set.