The best way to safeguard your interest is to shop carefully, and look for the best mortgage that you can find. A real estate broker can help you, and some local newspapers even print the current interest rates on a weekly basis. Look at all these pieces of information carefully and decide what is best for you. Your best source of finding the right lender is the Yellow Pages. You should go down the list and call as many as you can. Ask for rates, points, and all other costs (for example, FHA, fixed-rate, ARM. All these terms are explained in the Glossary).

It is not a bad idea to ask friends as to where they got their mortgages and what their experiences were with the lenders. Always deal with a reputable lending institution rather than search for a "deal" that could end up costing you time and money.

LOCKING IN RATES

Rates are always fluctuating, therefore you have to make sure that you ask about the Lock-in, when you speak with a mortgage lender. A lock-in is the period for which the quoted rate will be valid. A lock-in protects you because you will be assured of getting the best rate when you are ready to assume the mortgage (usually a month). If you haven't locked in, then you may find that the interest has changed from the time you last got the quote. At the same time, get the amount of the application fee clarified.

Often, a lender may offer a 60-day lock-in; in return he may want 1% non-refundable fee. Other lenders may simply refuse to lock-in because the market is too volatile and they will offer you the prevailing rate at the time of closing. Never go with a lender who offers you a low rate and a long lock-in period. This is a red flag - you will have to pay a high price in incidental fees.

GATHERING DOCUMENTAION

When you approach a lender have all the paperwork with you. Make a list of your accounts, such as, checking, savings, and all your debts. Always include account numbers and balances. Also, bring copies of car titles, a list of securities you own and their value, copies pf 1099 tax forms to show dividend, interest, and royalty income; if you have rental property, bring proof of rental income. If either spouse is divorced show proof of alimony and/or child support that you are paying or receiving. Bring a list of jobs that you have had over the last 10 years, with addresses, phone numbers, income and the names of supervisors; as well, bring W-2 forms for the past two years.

Help the lender verify your income and your net worth. This will speed up the loan process significantly.

And finally, get an idea from the lender as to how long the process will take. Phone regularly and keep on top of things. As well, keep the seller and real estate broker informed of your progress.

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