There are lots of ways to find an appropriate mortgage and lender. Obviously the best way is to find a lender who is willing to work with you, explain everything thoroughly, address all the fees in detail, and help you select the most appropriate mortgage for your financial situation. If you have a current lender, this is a good place to start. If you don't know any lenders, but you are using a real estate agent, this is another good place to start. Also make sure that you talk to your family and friends who know or have used lenders.

You can find lenders in the phone book, in the newspaper advertisements, and even on the Internet. They do not have to be local, although there is certainly some advantage to this, especially if this is your first home purchase.

Lots of people like to find their sources on the Internet, hoping for a better deal. In fact, there are websites that advertise that you can "make lenders compete for your business." Although most of these companies are legitimate, you should expect that most correspondence will be handled via email or mail, and it's a lot tougher to get your questions answered. Also, there are times when the final quotes come out much higher than the original quote that was used to get you interested in using their service. If you are experienced and know the questions to ask, an online service may be more than adequate, especially if the terms of the loan are better than what you can find locally.

Before shopping around for a mortgage lender, it is advisable that you make a list of the certain terms and personal concerns to ask any lender.  Begin the list with the amount of mortgage you are inquiring about, ask about the interest rates, PMI, second mortgages, penalty fees, closing cost, application fee, appraisal fee, flexible closing, lock-in rates and terms, and fixed or variable rates.  From this point, you should have enough information to decide which lender you feel most comfortable with.

To begin with, there are a number of websites that you can use to check the current lending rates in your area. Three good websites for evaluating rates are Bankrate.com, Lendingtree.com, and Mortgagerate.com, but remember these are averages or available rates, not necessarily the rate you finally receive. That will depend on numerous factors, including the size of the mortgage, the amount of your downpayment, and your credit score. Still, this can give you a good idea of the lowest rate that you might expect. They will ask you how much you want to finance, what state and city you are buying your house in, and what type of mortgage and points you are considering. The result will be a list of available mortgage companies (local, distant and online) and their rates. Review the results, see if there are any that you are aware of, and then contact them. There is also a new service, at Mortgage Marvel, that lets you input a few facts and then view the lenders available in your local area, and compare their rates and estimated closing costs. You also can link directly to the lender from this site.

If you can, always talk to a lender. Applying online is just fine to see if you even qualify, but after that you are in control! Have your list of questions ready, and see how willing they are to carefully explain things to you. Try at least three different companies and then make a choice if you are comfortable with any of them. If not, try some more, or talk to some other people to see who they have used and what their experiences have been.

Once you select a lender, then you can begin the application process.

Begin the application process