Mortgage Worksheet

Because understanding different mortgages can be confusing, it's best to compare them, in writing, side-by-side. Look at all the costs, including loan and origination fees and discount and origination points.

Ask the following questions:

• Are there prepayment penalties? If so, what are they, and how long is the penalty period?
• Is the interest rate subject to change, and if so, when and how often?
• What do potential changes in the interest rate mean for your monthly mortgage payment, and can you afford any potential changes?
• What are the mortgage insurance requirements?

Remember, compare the annual percentage rate (APR) to determine which loan is the most cost effective.

Ask what the Annual Percentage Rate (APR) of the loan is. The APR factors in both the interest rate and fees.

Make sure you review your "good-faith estimate" in writing from each lender. A good-faith estimate will outline all the costs and help you compare lenders and mortgage products.

Take your time when comparing. Don't be afraid to ask questions; lenders know it can be confusing and most are very helpful. If you're a first-time homebuyer, have a trusted family member or friend help you compare. Don’t be pressured into agreeing to anything you are not comfortable with.