Learn About Mortgages Before You Shop
by Ellise Walsh

There is no doubt that the world of home shopping and mortgage applications can be a confusing one. Banks, real estate agents and mortgage brokers sometimes seem to be speaking a different language, and it is all too easy to become lost and confused by this new terminology.

The potential home buyer and mortgage shopper can do themselves a world of good by doing some research before shopping for a home or a mortgage. Getting familiar with the terms and technology used in the mortgage world can help you to understand the terms you are being offered, and it will also help you intelligently compare terms and conditions between competing mortgage products.

The internet is a great place to start this learning process. There are a myriad of web sites all over the internet that contain excellent glossaries of financial and mortgage terms. These concise definitions of such seemingly vague terms as points, variable interest rates and teaser rates will give you a leg up on the mortgage process while at the same time helping you to avoid predatory mortgage lenders.

The internet also contains a great many excellent mortgage calculators which instantly allow you to compute your monthly mortgage payment on your potential dream home. All you need to is enter the amount of the mortgage, minus your down payment, and the interest rate for which you expect to qualify. The mortgage calculator quickly runs the numbers and gives you your anticipated monthly payment. A mortgage calculator is a great tool and will give you a very good idea of how much home you can afford.

It is also a good idea to at least talk to your bank or mortgage lender before you head off on the search for the perfect home. Even though you have run the numbers on the mortgage calculator and think you know how much you can afford to pay for a home, the bank may have other ideas, based on your personal circumstances and credit history. Any large outstanding debt will reduce the amount the bank is wiling to lend you, so it is a good idea to get an idea on the size mortgage for which you qualify. Becoming pre-approved or pre-qualified for a mortgage will also make you much more attractive to home sellers and real estate brokers.

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