Homework is important before seeking mortgage

November 11, 1990

Concerned that the savings and loan bailout means bad news for homebuyers hunting for a mortgage?

"Don't be," says Brandon Gaines, president of the Greater Baltimore Board of Realtors. "If you can afford the down payment and interest rates, you should have no trouble qualifying for a loan."

"You do, however, need to educate yourself about lenders, the business of lending, and your options and responsibilities," Mr. Gaines said. "Begin by meeting with a professional -- a real estate agent who is not representing a specific lender, but rather one who will provide a list of reliable lenders and suggest other possible sources for a mortgage."

"In addition, brush up on your mortgage terminology. The more knowledgeable you are before you meet with potential lenders, the better you'll be able to evaluate their mortgage packages," he said.

Local savings and loans lead the list of common sources for a mortgage.

Commercial banks are another option. "Shop around," advises Mr. Gaines. "Begin with one with which you are the most familiar -- possibly a previous lender -- and ask lots of questions. Once you have a feel for the different types of mortgages, you'll feel more confident asking questions elsewhere."

"Mortgage bankers or brokers are another route many homebuyers choose," Mr. Gaines said. "They are in touch with many mortgage sources, and often can get better loan terms and rates. A fee may be charged for this service. Again, remember to shop around. Lenders are in the business of selling loans. Don't be afraid to negotiate with them on rate and terms or ask for a tailor-made mortgage to meet your specific needs.

"Don't overlook less traditional sources or financing. These include life insurance companies, finance companies, credit unions, pension funds, foundation-endowment money, friends, relatives and even seller financing."

Your real estate agent or mortgage banker should be able to provide you additional information on these alternatives. In addition, your real estate agent may be helpful as a third-party point of view when it comes time to evaluate your choices.

"Once you've decided on a direction to go, be prepared to supply the usual documents and personal financial records," Mr. Gaines said. "Before you arrange a meeting with your chosen lender, ask what you need to bring. This will save you time."

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