OK.  You have decided to work with both a couple of mortgage brokers and check out what’s going on on-line.  All you need are the different interest rates they charge, right?  Wrong!  The ultimate cost of your mortgage has several components.  You need to know all of them before you can start comparing.  Here is what you need to know:

     Interest Rates.  Ask for a list of current mortgage interest rates and whether the interest rates being quoted are the lowest for that day or week.  If the mortgage you are getting is an ARM (adjustable rate mortgage) be sure to find out the rules for your mortgage interest rate going up or down.

     Points.  Points are fees that you pay to the mortgage lender for the privilege of borrowing money from them.  Really they are there to cover the costs that the lender incurs processing and maintaining your mortgage loan.  Points and mortgage interest rates are related- the lower the points the higher the mortgage interest rate.  If you think you are going to be in a house for a long period of time you may want to “buy down your mortgage interest rate” by getting a higher point mortgage loan.

     Fees.  Fees, Fees, everywhere there are fees.  Official sounding things like mortgage loan origination fees, underwriting fees, broker fees, mortgage settlement fees and closing costs.  Every mortgage lender should be able to give you an estimate of their fees. 

     Private Mortgage Insurance.  PMI is like buying insurance when playing blackjack- it's a sucker bet.  If you can avoid paying PMI, do so!  When getting quotes, find out the mortgage lenders policies for PMI.  What percentage down payment do they require to avoid paying PMI? 

Once you have all of this information you should be able to compare the mortgage quotes on an apples-to-apples basis.