If you are shopping for a mortgage you will find interest rates differ from one lender to the next. It pays do your homework and research lenders. Here is all you need to know about shopping for a new mortgage.

Mortgages vary widely from one lender to the next. Shopping for a mortgage is no different than shopping for a kitchen appliance; it pays to comparison shop. How do you compare one mortgage to another? With so many variables to a mortgage, is one mortgage really better than another?

Mortgage loans are not created equally. A number of factors beyond the interest rate are important for comparison. The Annual Percentage Rate (APR) is a useful comparison to make because it factors in the cost of having the mortgage on an annual basis. This APR factors all lender fees along with the interest rate. The APR does not factor in points paid at closing so be sure to include this in your comparison.

Make sure the interest rates you are comparing are of the same type; comparing fixed rate mortgage to adjustable rate mortgages does not accomplish much as the adjustable rate will change periodically. If you decide on an adjustable rate mortgage make sure there is a periodic cap. Caps protect the borrower when interest rates go up by limiting the amount the rate can change over the term of the mortgage.

If the mortgage you are considering comes with a discount interest rate make sure you understand how long the introductory periods lasts and what happens to the interest rate when this period is over. Always ask the lender if the advertised interest rate is a discount rate.

To learn more about saving money when shopping for your mortgage loan sign up for a free mortgage guidebook.