You will have several choices when it comes to selecting your mortgage lender. Home financing is available from mortgage companies, savings and loan associations, banks, credit unions and others. Each will have its own rules, rates and fees. When you compare financial institutions, be sure to look for variations in the way mortgages are offered - distinctions that can mean dollars of difference to you. You will want to research the various lenders in your area to see which one best meets your immediate and long-term objectives.

Make sure to do the research into which option will provide the best financing option to fit your needs. As you shop around for a lender, it's important to understand the difference between different types of mortgage professionals.

Mortgage Banker:   A mortgage banker (sometimes referred to as a loan officer) works directly for a lender - the company that makes the loan. A mortgage banker will present you with only that lender's program of mortgages, so you should to speak with several lenders to do comparative shopping.

Mortgage Broker:   A mortgage broker is independent from any specific lender. Brokers have access to several different lenders and many loan programs. Mortgage brokers are compensated directly by you and may receive payments from the lender as well. The lender may pay the broker what is called a "yield spread premium." The broker may receive a higher yield spread premium if the interest rate on the loan is higher. You should ask the mortgage broker what fees you will pay and what the yield spread premium will be. Even though using a broker may entail more fees than getting a mortgage loan directly from a banker, these extra costs may be worthwhile if the broker can obtain a loan with an interest rate that is lower than a rate that you could obtain on your own by working directly with a lender.

Which one should you use? The entity who gives you the best deal! That's why you should take some time to shop around. A good place to start is to ask friends, relatives and co-workers for recommendations for a mortgage lender or broker who provides competitive rates and excellent customer service.