Buying a home will be one of the biggest purchases you will ever make in your life. It is important to take your time to learn about mortgages as well as the lenders that provide them. Don't hesitate to interview a handful of lenders to gain a clear understanding about which lender and which loan programs will best meet your needs. Here are some questions that you should consider asking a mortgage lender:

• What types of mortgage loans do you offer?
• Do you have any specific programs for first-time homebuyers?
• What interest rates are you currently offering for a 30-year fixed rate loan without paying any points?
• Do you offer any incentives, such as a reduction in the interest rate or closing costs, if I am currently using any of your institution's other financial services?
• Will mortgage insurance be required for loans other than FHA-insured or VA-guaranteed mortgages?
• If I obtain a mortgage from your financial institution, will your company continue to service the loan over its life, or do you think it will be sold to another company to be serviced?
• How much principal must be paid before the insurance requirement is dropped?
• What are the insurance premiums and are the premiums refundable if I prepay the mortgage?
• Will I be required to establish an escrow account for taxes and insurance? If so, how long must I pay into the escrow account? At some point, will the lender permit me to cancel the escrow account and pay these costs directly?
• If the lender does not require me to establish an escrow account for payment of taxes and insurance, can I voluntarily establish an escrow account? (You should carefully consider what your monthly payment would be for principal, interest, taxes, and insurance, even if you are not escrowing these payments and taxes and insurance are not included in your monthly payment amount.)
• What fees will be charged at closing, including such things as points, loan origination, abstracts, attorney's fees, appraisals, termite inspection reports or credit reports?
• If I pay off this loan early, is there a pre-payment penalty? If so, can I obtain a loan with a higher interest rate without a prepayment penalty? (You should carefully consider whether you want to obtain a loan with a prepayment penalty. Prepayment penalties can be thousands of dollars if you pay off your loan early.)