Mortgage Loan Tips

1. Make a list of questions for your banker.
Ask him or her to familiarize you with the various mortgage programs available—for example, fixed-rate and adjustable-rate mortgages and the advantages and disadvantages of each.

2. Decide how you want to secure an interest rate.
You will need to choose between “locking in” and “floating” your interest rate. “Locking in” your rate means that your lender commits to the interest rate for the loan when you apply. If you decide to “float” the rate, you can commit to an interest rate anytime between applying for the loan and closing. “Floating” can be a good choice if you believe interest rates will drop before your closing; however, interest rates may rise, so securing an interest rate up front is also an attractive option.

3. Decide if you are willing to lower your interest rate by “paying points.”
A point is 1 percent of the amount of your mortgage. You can sometimes get a lower the interest rate—in effect, prepay some of your interest—by paying for additional points. You’ll need to be prepared to make this payment at your closing.

4. Gather the documents you’ll need and keep them organized.

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