Despite an excess of loans and lenders, comparison shopping has been eased by
the development of computer-loan origination systems and mortgage-reporting
services - firms that survey major lenders in metropolitan areas every week or
so and publish information sheets on who is offering what loans on what terms.
Shop for lenders offering the best deals. Check with several mortgage
companies and use one or more reporting services. Rely on your own efforts, lots
of telephone calls and possibly some old-fashioned legwork. If there isn't a
reporting service covering your area, begin the search at your own bank or
savings and loan.
Sources of Mortgage Money:
Independent Mortgage Companies make just over half of all home
mortgages, including most VA-guaranteed and FHA-insured loans.
Savings Institutions: Savings and loan associations and savings banks
originate close to a quarter of home mortgages. Most are conventional loans -
those not guaranteed by the VA or FmHA, or insured by the FHA.
Commercial Banks are active in residential lending. Banks also are a
major supplier of loans for mobile-home buyers.
Mortgage Brokers act as intermediaries. A broker keeps tabs on the
mortgage market through ties to local, regional and national lenders, and can
refer a prospective borrower to a mortgage banker, savings institution or a
commercial bank. Brokers don't lend money and can't approve loans.
Credit Unions make close to one-third of all first-mortgage loans, but
you must be a member.
Public Agencies: State and local finance agencies make
below-market-rate financing available to eligible low- and moderate-income
first-time buyers through the sale of tax-exempt bonds.
Employers and Unions: Don't overlook your employer as a source of
assistance. An employer may subsidize the interest or even act as a lender.
Unions are another possibility. The AFL-CIO offers what it calls "Union
Privilege." Unions that sign on can make first-time home loans available to
eligible members for as little as three percent down.