Choosing a lender or a mortgage broker can be an arduous process — there are so many options to choose from, and your choice will have a large impact on the rates and terms of your mortgage. Follow these tips from Trulia to select the banker or broker who can get the best mortgage deal for you.

Get recs from people you trust

Ask friends, family and acquaintances who have purchased homes to tell you about their brokers or mortgage lenders. You could also ask a real estate agent whom you trust.

Ask people to rate brokers they’ve worked with in terms of the rates and conditions of the mortgages they’ve received and the ease of working with that broker or lender.

Questions to ask include: Would they use their broker again, and would they recommend using that broker to anyone else? Did the broker explain their loans’ conditions and rates in easily understood terms? Did they get the interest rate they were promised? Were there any unexpected fees?
Shop online

Surf the Web to shop anonymously for home loans and rates. This will give you a good idea of home loans’ rates and fees. One place to try is Trulia Mortgage, which can get you quotes from banks and credit unions across the U.S. — no personal information is required.

You can simplify your search by choosing just one type of loan (e.g., a 30-year, fixed-rate mortgage with no points) — that will make comparing options across the multitude available easier, especially since loan rates and terms can change daily.

However, when shopping online, it’s not a good idea to offer personal information like your social security number or your home address, which can be sold, or used to pull up your credit report.
Go to your bank

With the information you’ve gathered online, you can try your bank — the bank that has your checking account may be willing to offer you a deal — and compare their offerings.

Or, go to branches of local national banks, community banks and credit unions whose names you trust. Compare the rates and terms they offer with the ones you found online.

Check out mtgprofessor.com, which rates banks on factors including the transparency of their loan terms and fees.
Visit mortgage brokers

Once you’ve shopped online and at a few banks, visit a few mortgage brokers who’ve been recommended to you by friends, family and colleagues and see if they can offer you a better deal for your loan of choice. A broker’s job is to hunt down a loan by searching the offerings of several lenders.

Ask the brokers how they will be paid – a broker either charges a flat fee, earns money from lenders, or a combination of both. You want to make sure that their fees don’t prove to be too high. You can ask that the broker set his fee (what he will get from you and the lender) in advance in writing, making it no more than 2 percent of the loan. Be sure to have the broker disclose to you in writing all fees, terms, and penalties associated with the loans they suggest.

You don’t want the compensation that a broker gets from a bank to be too high — this compensation can encourage less than reputable brokers to steer you into loans with elevated interest rates and terms that don’t suit your needs.

You’ll also want to ask the broker how many lenders he’ll check for you for rates and terms.

You could also try only choosing from brokers who belong to the Upfront Mortgage Brokers Association. These brokers have agreed to provide advance notice in writing to consumers about the size of their compensations and where their compensations come from. The site offers a tool to search for loan officers by state.

Another website to check is NAMB.org, the website of the National Association of Mortgage Brokers. There you can look up the names of mortgage brokers in your area.

Before you hire a mortgage broker, also be sure to check his firm’s complaint record with the Better Business Bureau.

You’ve survived house hunting and the bidding and negotiating on your new home, and now it’s time to make it yours. But to do so, you have to sit down with various people, which may include the seller, your real estate agent, title and mortgage company officials and possibly your attorney at what’s known in real estate lingo as the “closing table.”

At closing, you will close on the purchase of your new home, and if you are taking out a mortgage, on your home loan, as well. The whole process may take about an hour. Here’s what’s expected of you:

Complete the walkthrough

Before the actual closing, you’ll most likely have the opportunity to perform a walkthrough of the property and confirm that the condition of the home is as it should be, as specified in the sales contract.
Bring enough cash

At closing, you’ll be paying for your share of the closing costs, and will be bringing the down payment, so be sure to bring a certified check or a cashier’s check. Your lender will provide a lender’s check for the remaining balance that’s due on the home.

Your HUD Uniform Settlement Statement (which both you and the seller will sign) will detail the closing costs (plus all the monies involved in the transaction), as well as who is expected to pay them.
Show id

You will also be required to show proof of your identification, such as your driver’s license or passport.
Proof of insurance

Bring a copy of and proof of payment for your homeowner’s insurance, plus your flood insurance policy, if you have one. Your lender may want to review these before allowing you to close on the home.
Sign on the dotted line

To transfer ownership of the home, both the buyer and seller will be required to sign several documents.

You may be required to review and sign the purchase agreement, a promissory note for your loan, mortgage documents, title documents, the settlement statement and the truth in lending statement (which will outline the costs of your loan, your payment schedule and amount financed), while the seller will also sign the settlement sheet — and, importantly — the deed to the home to transfer ownership of the property to you. Copies of these documents will be filed at the county recorder’s office, but be sure to keep your own copies as well.
Take the keys!

Once all the necessary paperwork is completed and everything is in order, you will be given keys to the home. While you will no doubt immediately change the locks upon moving in, the keys are the final sign that the home is indeed yours.

If you have found yourself behind on mortgage payments recently, chances are you have been anxiously debating your next step. Do you let the bank take the home back, hand them the keys, and ride off into the sunset, or do you think more creatively and consider other options? Rather than tossing the dice on your financial future, let’s explore the difference between a foreclosure and a short sale.

Foreclosure: A foreclosure is the legal term used to describe how a note holder (your bank or lender) goes about stripping you of the title to your home. In the real world the process can take anywhere from a few months to well over six months from start to finish, depending on the type of financing instruments that were used to secure the debt. But losing your home is only the beginning. Once completed, depending on the borrower, a foreclosure can also result in a credit score reduction of 200-300 points. This means you will have a much more difficult time securing credit in the future when you wish to purchase a car, obtain lines of credit, or even get new credit cards. When you do find someone to give you a loan, be prepared to pay much higher interest rates. To top it off, if you are searching for a job, be aware that many employers conduct a credit check on new hires and a poor credit score can be used as a reason to toss your resume.

So if a foreclosure is so bad, what other option can a homeowner consider? Many homeowners use a short sale to avoid a foreclosure.

Short Sale: A short sale, sometimes known as a “pre-foreclosure sale”, occurs when a bank agrees to accept less than what is owed on a home in order to avoid a foreclosure. Remember, lenders don’t want to own your home. Because of this they will often accept a reasonable loss to avoid the costs and hassle of adding another home to their growing national inventory. Though a short stale will still hurt your credit score, it will be looked upon by future creditors far more favorably than a foreclosure. For instance, Fannie Mae recently adjusted their guidelines to require only a two year waiting period for sellers who used a short sale to purchase a new home. At the same time, they lengthened the waiting period for sellers who have fallen victim to a foreclosure to five years. Why the difference? A short sale is seen as a satisfaction of at least part of the debt, rather than a complete write down. In addition recent federal legislation, in most cases, has removed the burden of a tax liability for the forgiven debt on primary residences.
So which is better a foreclosure or a short sale?

Without question a short sale is almost always the best option. To explore using a short sale to sell your home, talk to a local agent, preferably one with experience in pre-foreclosure sales, and request a short sale package from your lender as soon as possible.

Buying a home is a big step — it’s possible that it’ll be the largest purchase you’ll ever make. You want to get it right. Use these tips to guide you through the process:

Save for a down payment

Usually, the more money you can put down on a home, the better. That’s because the more you borrow for a home, the more you’ll pay in interest on your mortgage down the road. It’s easier to qualify for a mortgage if you have a down payment. Having a down payment also may help you to qualify for a lower interest rate on a mortgage, and may make your mortgage payments lower — and easier to make — once you own a home.
Determine how much you can afford

Before you set out to buy your dream home, compute how much you can afford, keeping in mind your current expenses, how much it will cost to own and maintain the home and how your expenses may grow or change in the future. There’s no sense spinning your wheels looking for that mansion when a more affordable condo is more your speed.
Weigh needs vs. wants

Sure, many of us want a home in the very best location with all the latest amenities in the latest style. But is that what you need? While it’d be great to find a place that fills all our needs and wants, often we have to sacrifice and buy a place that meets just some of our necessities and desires. So, think about what you must have (e.g., a reasonable commute to work), versus what you’d like but can do without — say, a backyard with a pool and a hot tub. Doing so will make it much easier when it comes time to go house hunting.
Secure financing

Have a lender pre-approve you for a mortgage. Being pre-approved means that a lender has agreed to lend you a certain amount based on your credit rating and finances. Being pre-approved puts you in a better position to look for a home — you know exactly what you can purchase, and when it comes time to bid on a home, you’ll be in a better strategic position than a buyer who hasn’t been pre-pproved.
Research

Use Trulia to investigate your local market and the homes you’re considering. Knowing the strength of your real estate market (e.g., whether it’s a buyer’s or seller’s market) and the history of a home (such as when it was purchased and for how much) will help you bid more intelligently on a home, and will give you an edge when negotiating with a seller.
Get an attorney

Buying a home is a complicated process — so it’s best to recruit the assistance of an expert. A real estate attorney will look out for your needs during the home-buying process, will read the fine print and will help explain anything you don’t understand. Think of it as an insurance policy against running into troublesome real estate hassles after you’ve signed on the dotted line.
Inspect

Once you find that home you’d like to buy, get the property inspected by a qualified professional and make your purchase contingent on satisfactory inspection results. By doing so, you can find out if a home is in good condition, or be alerted to any serious (and costly) problems with the home. If you make your purchase of a home contingent on your satisfaction with the home’s inspection reports, you have an out should those defects prove to be too expensive to fix.

Buying and owning a home is a big expense — besides the purchase price, there are the property taxes, heating and cooling costs, maintenance expenses…the list goes on. But the good news is that there are tax savings available to homeowners. Read on to find out about some of the top tax deductions and credits available to those who own a home.
Mortgage interest and points

Most homeowners can deduct the interest paid on their mortgage as an itemized deduction on Internal Revenue Service form 1040, Schedule A. (Deductions reduce your adjusted gross income when computing your taxable income.) And because mortgage interest makes up much of homeowners’ monthly mortgage payments, that’s a big tax break.

However, if your mortgage is more than $1 million, or your home equity loan is greater than $100,000 you may be out of luck.

The amount of your first mortgage may limit how much you can deduct for mortgage interest on your home equity loan, especially if the debt on your home is greater than your property’s value. Read the Internal Revenue Service’s Publication 936, Home Mortgage Interest Deduction for complete requirements and information.

If you itemize your deductions on Internal Revenue Service form 1040, Schedule A, you also may be able to deduct your mortgage points in full the year they were paid. If you are refinancing, you can, based on the number of years of the loan, deduct some of the points. Read the IRS’s Tax Topic 504 – Home Mortgage Points to get all the requirements and details.
Real estate taxes

As a homeowner, you no doubt hate paying property taxes. But the good news is that real estate taxes can be claimed as an itemized deduction on Internal Revenue Service Form 1040, Schedule A. To find out how much real estate tax you’ve paid, check your escrow account through your lender.

For homeowners who don’t have enough deductions to itemize, they can now increase their standard deduction by adding some of their property taxes to their standard amount, under a new law. Single homeowners can increase their standard deduction by as much $500 (or $1,000 for those married filing jointly). This new law will be in effect through the 2009 tax year.
Moving expenses

If you had a work-related move (say, if you landed a new job or if your employer relocated you to a new location), you may be able to deduct your moving expenses. (Use IRS Form 3903 to calculate how much you can deduct and note those expenses on Form 1040.)

To qualify for the deduction, your new job must be at least 50 miles further from your old home than your old job was. Also, you need to have worked full-time for your employer at least 39 weeks in the first 12 months after your move to your new home. Read Topic 455 — Moving Expenses from the IRS for more information.
Capital gains tax exclusion

Imagine being able to sell your home, pocket the profits and not have to pay Uncle Sam a dime in taxes. That’s the tax benefit available to homeowners as long as they’ve owned their home for at least five years and lived in it at least two of the five years before selling it.

Single homeowners can realize up to $250,000 tax-free in sales gain from the sale of a home, while married joint filers can see up to $500,000 tax-free in gains. Read Topic 701, “Sale of Your Home,” for more information.

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at www.GinnieMae.gov.