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Your choice of lender
and type of loan will influence not only your settlement costs, but also
the monthly cost of your mortgage loan. There are many types of lenders
and types of loans you can choose. You may be familiar with banks, savings
associations, mortgage companies and credit unions, many of which provide
home mortgage loans. You may find a listing of some mortgage lenders in
the yellow pages or a listing of rates in your local newspaper.
Mortgage Brokers. Some companies, known as "mortgage
brokers" offer to find you a mortgage lender willing to make you a
loan. A mortgage broker may operate as an independent business and may not
be operating as your agent or representative. Your mortgage broker may be
paid by the lender, you as the borrower, or both. You may wish to ask
about the fees that the mortgage broker will receive for its services.
Government Programs. You may
be eligible for a loan insured through the Federal Housing Administration
("FHA") or guaranteed by the Department of Veterans Affairs or
similar programs operated by cities or states. These programs usually
require a smaller down payment. Ask lenders about these programs. You can
get more information about these programs from the agencies that run them.
CLOs. Computer loan
origination systems, or CLOs, are computer terminals sometimes available
in real estate offices or other locations to help you sort through the
various types of loans offered by different lenders. The CLO operator may
charge a fee for the services the CLO offers. This fee may be paid by you
or by the lender that you select.
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