Understanding Mortgages and Home-Buying Costs

Mortgage offers can differ in interest rates, fees, discount points, loan terms, and other conditions. Comparing the headline interest rate alone may not reveal which loan best fits your circumstances.

When evaluating a mortgage, review:

• The interest rate and annual percentage rate (APR).

• The monthly principal and interest payment.

• Estimated taxes and insurance.

• Lender fees and other closing costs.

• Whether the rate is fixed or adjustable.

• Down-payment requirements and any mortgage insurance.

• Loan terms, eligibility requirements, and potential assistance programs.

Request Loan Estimates from lenders and compare the offers using consistent assumptions. Ask questions about fees or terms you do not understand.

Do not assume you qualify for a particular loan or assistance program until the relevant lender or program administrator confirms your eligibility.

Helpful resource: HUD — Buying a Home