 TITLE: How to Compare Mortgage Rates CONTENT: How Do You Evaluate a Mortgage?\n-------------------------------\nBefore you start assessing mortgage loans, it's important to learn a few basic terms. The more informed you are when you begin your search for a home loan, the better equipped you'll be to make the right decision. Here are some terms you should know:\n*   **Loan term:** This is the length of time the lender agrees to give you to pay off your loan balance. Most mortgages offer terms of 10, 15, 20 or 30 years. During this period, you will make monthly payments to the lender to cover the principal and interest (and escrow payments if you have them).\n*   **Principal:** The principal is the remaining balance of the loan, not including interest.\n*   **Interest:** This is the fee a lender charges on an ongoing basis for a loan they issue. It's noted as a percentage. The annual percentage rate (APR) on the loan includes the interest rate but also factors in other fees. Interest rates are either fixed or variable. You will lock in your rate during the application process.\n*   **Escrow****:** You may pay into this account, which the lender will use to make payments for property taxes, homeowners insurance and mortgage insurance (if applicable) on your behalf. This is different from an escrow account that is utilized during the homebuying process and holds your earnest money deposit.\n*   **Points****:** Some lenders sell what are called origination points and discount points. You can buy origination points to reduce the fees you pay to the lender during the loan process, and discount points can help you lower the interest rate on your mortgage. They essentially let you prepay interest in order to reduce your monthly payment.\n*   **Closing costs****:** These are fees you have to pay when the loan is issued. Costs generally range between 2% and 5% of the home purchase price.\nIt's tempting to shop based on rates alone, but it's key to consider the quality of the lender you'll be working with. Check online reviews from past and current borrowers. You could also refer to the Better Business Bureau and Consumer Finance Protection Bureau.\nA mortgage broker is an option if you're having trouble finding a lender you want to work with. They can shop your information around to lenders in their network to find a loan product with competitive terms. Or you can ask friends and family for recommendations. END