Loan shopping made easy

Even though credit may be tight, there are an amazing number of choices when it comes to obtaining a mortgage. How can you tell which one is right for you?

Whether you are purchasing or refinancing your home, it's important to get the best possible deal for your particular mortgage situation. Mortgages, however, are difficult to evaluate. Even for mortgage professionals, there are so many programs available that it's almost impossible to keep track. Furthermore, the different lender fees and rates make it difficult to do accurate comparisons. Fortunately, there are new online tools that make that decision easier than ever before.

The quest for the perfect loan begins with finding the right lender. Here are the most common options:

1. Apply directly for your loan to your bank or credit union
The challenge with going to a single lender is that you only have one option. If the lender runs out of funds or has another challenge funding your loan, you now have to start the process with someone else. If you're purchasing a property, this puts you in a precarious position.

If you fail to fund your loan on time, you may have to cancel the transaction. You can also lose your earnest money deposit. Furthermore, even if you are a preferred customer, a mortgage broker in some cases may give you a better deal than the lender. For example, when I applied to my bank for a purchase money loan as a private banking customer, I thought I would get the best possible deal. It turned out that our mortgage broker obtained a better interest rate and lower fees, from exactly the same bank.

2. Apply through a mortgage broker
The advantage of working with an ethical mortgage broker is that they can offer you a wide variety of loans from different lenders. If there is a problem with one lender, they can take your file to another lender. Also, as mentioned in the example above, they may be able to negotiate better rates and fees than you can by contacting the lender directly.

3. Apply online with a company such as LendingTree
This site requires you to enter your personal information. It is then sent to different lenders. ...CONTINUED

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