Finding a home loan lender, or mortgage lender, is the easy part. Decide which lender to use is not. Since your home is probably the biggest purchase you will make, it makes sense to shop around for the cheapest mortgage.
There are many costs to getting a home loan. When many people think about the cost of a home loan, they think about the interest rate, which is a cost, but a lot of other costs are involved. Although various lenders may have different names for certain fees, be on the lookout for these types of fees and compare what different lenders may charge you.
The interest rate can be fixed or variable. A fixed rate is just that, set for the life of the loan. Variable, or adjustable, means that the rate will be fixed for a certain time, then adjust up or down with a certain index. Your lender should be able to provide you with the name of the index they use. The period during which a variable rate loan is fixed varies from 1 month to a certain number of years. Read the fine print to see how much your payment could jump after the end of the fixed-rate period. Remember that when the interest rate goes up, the payment of your home loan will also be.
The APR is sometimes different from the interest rate quoted for the loan. This is the annual percentage of all costs have been funded. Compare the APR of various lenders.
Capital costs are what some lenders charge you for "blocking" the interest rate you have indicated. It is usually for a fixed term. If the term expires before your home loan is paid, you may not be able to get the same interest rate.
Application fees may be charged by lenders or brokers. These are usually a fixed amount. You may have to pay these fees even before they process your home loan, which could be several hundred dollars in some cases, so ask if a portion of it is refundable if the home loan does not go through. These fees may also include the cost of running your credit reports. You may not be charged an application fee, but be struck with an original fee, or vice versa, or a combination of both. So shop.
The processing or subscription fees are usually billed by the lender to cover the actual processing costs of the home loan. These can vary considerably from one lender to another and need to be compared.
If you do not have 20% equity in the property, by setting up a large down payment, you may be required to pay PMI on your home loan, which is private mortgage insurance.
There are other fees that will be billed as survey and survey fees, title insurance, home insurance, inspection fees, escrow fees, and taxes. You may also be required to prepay a certain amount of interest on your home loan.
There are certainly a lot of costs associated with applying for a home loan, but do your homework and compare the costs of different lenders and I think you will leave with an experience that will be personally satisfying for a long time.