If you're in the market for a new home or a mortgage refinance, don't do anything until you understand a little more about how lenders work and the home buying process. There are several points to remember when shopping for your home loan, and some of them might not be what you want to hear.

* Not All Lenders Have Your Best Interest in Mind All lenders will make one thing very clear to you - they want to make your home loan purchase fast and easy. While this makes for great advertising copy and even sounds good on the surface that really isn't what you as a potential homebuyer need to hear. Remember that when you are looking for a good loan deal, it's best to take your time, ask lost of questions, and ask those same questions to as many different lenders as possible. You will be amazed at the different things that companies, and even individual agents within the same company, will offer you. In addition to obvious things like interest rates, how much you qualify for, and what your payments will be, make sure you ask about points, closing costs, agent fees, and all additional fees that will be added onto the total cost of your loan. Most companies like to add in fees for any number of things after you've already been approved for the loan and started the process. That's when they'll add in transaction fees, filing fees, or any other costs that most people don't take the time to ask about. Many times these fees will be added onto the principle mortgage amount, not the closing costs. It might not sound like a lot to finance an extra $2,500 dollars on top of a $100K loan over the course of thirty years, but do you really want to give that agent more of your hard earned money for nothing? Once you find out all the details and exactly how much your mortgage will cost, with all extra fees included, check the paperwork to make sure everything looks the way it should. Just because they tell you something over the phone doesn't mean it won't still be slipped in on the back page of your mortgage packet.

* Know the Differences between Different Loan Options Make sure you find out about all the different types of loan products that are available to you. The difference between a 30 year fixed rate loan and a 30 year adjustable rate loan is more than just an adjustable interest rate. Find out what everything means, and what will happen if things change in the future. Often time's companies will allow you to purchase an adjustable rate mortgage with the option of converting it to a fixed rate later on down the road. Some companies will offer interest only loans, where the only amount you are required to pay for the first few years is the interest on the loan. This option can be good if you have a property in mind that you know you want, but you can't quite afford. Only go this route if you are 100% positive that you will be generating enough income in the very short future to pay more than just the interest on the loan. Sometimes companies will qualify you for a loan of this type even if you can't afford the interest and principal combined. If you do get qualified in this manner, make sure you will be able to make the payments in the future.

* Find out About the Home Buying Process Ask people you know who have already purchased their homes what problems they ran into during the process. Find out about any surprises they had, or if they were happy with the people they worked with and the loan they received. A lot of mortgage companies want you to know the exact property you are interested in buying, and if not the exact property some specific details about what you are looking for. Find out about home values in the area where you are looking, and see if you can find an old appraisal for the home online. If you do a little searching on the internet, you can usually find out a lot about the specific area you are looking for. Search for things like crime statistics, average income, the predominant property type and the average home value. You can type in the exact address you are looking at and many times you will find out some very detailed information about the property. Try doing a search for the MLS listings in your area. MLS stands for multiple listing service and is a type of industry standard the professionals use to locate information about properties for sale and the areas where they are located.

Buying a new home can be one of the most exciting and challenging things you will ever do, but by finding out everything you can about the process and the variables involved in you can better prepare yourself. By doing a little research and anticipating what to expect during the home buying process you can save yourself a ton of money, time and sleepless nights knowing that you have all the information you need to make the best decision you can.

For the full version of this article log on to http://www.financialproductsdirect.com

About the Author

David Nemer is the owner of http://www.financialproductsdirect.com and a freelance writer.

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