When you’re shopping for a home mortgage, it can be easy to get fixated on that all-important monthly mortgage payment. After all, when it comes time to pay the bills a lower mortgage rate doesn’t do you much good if you can’t afford the payment. Even knowing your interest rate isn’t enough. There are some important bits of information you need to get when you’re comparing lenders.

Not Just A Percentage

When it comes to your loan rate, you want to make sure you’ve got all of the information. You need to know, for example, what the loan’s annual percentage rate (APR) is. The APR is a number that includes things like points, broker fees and credit or other charges.

You also need to find out whether the rate is fixed or adjustable. Understand that, when the rate goes up on an adjustable rate mortgage, the monthly payment goes up, too. If the mortgage does have an adjustable rate, ask how the rate and payment will vary, and whether it will go down if rates go down.

You should ask your lender for a full list of their mortgage rates. Find out if those rates are the lowest for this day and week.

The Value of Points

If you’ve done any looking around at all, you’ve probably heard talk of “points” in regard to your mortgage. Points are a fee that you pay to the lender. Points are intertwined with your interest rate. The more points you pay, the lower your interest rate will be.

The tendency is for your mortgage broker or lender to quote points in terms of the number of points you’ll be buying. Instead, you should ask the lender to quote points as a specific dollar amount so you’ll know exactly how much you have to pay.

Pay close attention to points. In some cases, the availability of points may make a particular lender much more attractive than another, even if the initial interest rate is a bit higher.

Understanding and Negotiating Fees

Your home mortgage is going to include some fees. There are fees for the loan origination and underwriting. There are broker fees. There are transaction costs, settlement costs and closing costs. These fees are a basic part of the mortgage process. Some are paid when you apply for the loan, and some are paid when you close on the loan.

Find out what the lender’s fees include. Sometimes, several fees might be lumped into a single line item. You should also find out when each fee must be paid. An appraisal fee, for example, may need to be paid when you apply for the loan. If you don’t understand a particular fee, ask for an explanation.

In some cases, your lender might be able to waive certain fees. Some lenders also offer mortgages that don’t have any of these kinds of costs, although you should expect a higher interest rate on this kind of a loan.

You’re likely to be paying on your mortgage for a long time. Make sure, going in, that you know what you’re paying for.