Explore different types of loans and know the steps you can take to make wise borrowing decisions.
Be sure to gather all important cost information.
Points are fees paid to the lender or broker for the loan and are often linked to the interest rate. Usually the more points you pay, the lower the rate.
Check your local newspaper for information about rates and points currently being offered.
Ask for points to be quoted to you as a dollar amount — rather than just as the number of points — so that you will know how much you will actually have to pay.
A home loan often involves many fees such as:
Every lender or broker should be able to give you an estimate of its fees. Many of these fees are negotiable. Some fees are paid when you apply for a loan (such as application and appraisal fees), and others are paid at closing. In some cases, you can borrow the money needed to pay these fees, but doing so will increase your loan amount and total costs. “No cost” loans are sometimes available, but they usually involve higher rates.
Ask what each fee includes. Several items may be lumped into one fee.
Ask for an explanation of any fee you do not understand.
Some common fees associated with a home loan closing are listed on the Mortgage Shopping Worksheet.
This article is published on KansasMoney.gov. Find more information by contacting these state agencies: