Shopping for mortgage loans can seem confusing, but it's not as stressful as you may anticipate. A few helpful tips to get started include getting pre-qualified, determining your monthly budget and shopping around.

Getting Pre-Qualified
This tells you the maximum sales price you can afford and gives you an estimate of your monthly payment. You only need to pre-qualify with one lender of your choice.

Sellers will not accept an offer without a buyer's pre-qualification letter, especially in today's market. You'll also find out if there's anything affecting your credit score, such as uncleared debts that can impact the interest rate and loan programs available to you. Knowing this information early allows many buyers time to correct problems prior to needing the loan.

Determine Your Budget:
Use the amount you're pre-qualified for as a starting point: your maximum purchase price. Then determine how much you can realistically afford each month on a mortgage, including property taxes, insurance, and, if applicable, PMI (Premium Mortgage Insurance)*. Discuss your desired monthly payment with your loan officer to estimate a maximum purchase price. I recommend using the lower of either the amount you qualify for or the amount estimated using your desired monthly payment.

*Not everyone decides to escrow their property taxes and insurance. The other option is to pay both separately each year when due.

Shop Around
Once you have a fully executed contract it is then time to shop for a lender. Determine what is important to you, whether it's a low interest rate, down payment, monthly payment, etc. Then try to speak with three lenders for a program that best fits your needs.