Everybody says you should “shop around” for a mortgage loan, but here’s my problem: What the heck are they? I like to visualize the stuff I’m going to buy and when I try to visualize the acquisition of a mortgage the only image that comes to mind is a guy stooping over while an enormous weight is loaded onto his shoulders. I don’t see a house. I don’t see a fence or a rose garden or a coffee pot or a grandfather clock. I just see a guy shouldering a massive burden in tenuous times, and why would I want to shop for something like that?
But I have to admit that, for me, the burden really isn’t the mortgage loan; the burden is my relative ignorance about mortgage loans. And ignorance, in my experience, is not bliss. Rather, it’s the well-seeded breeding ground for anxiety and defeat. So I told myself that this week I should seek the opposite of ignorance (which I guess is enlightenment) and instead of feeling anxious and defeated, I would feel the opposite: confident and triumphant. And it kind of worked.
I started my journey toward enlightenment by typing these words into my Google bar: “What is a mortgage?” And you can’t believe the response I got. I stared at my computer screen as the resources rolled in. It was like peering into a whirling galaxy of information. I tried not to panic, took a deep breath and entered a Web site about terminology, seeking a simple definition.
Here’s where things get a little tricky. To begin with, the word mortgage is both a noun and a verb. A mortgage is “a conditional conveyance of property as security for the repayment of a loan,” according to the Princeton Web site, wordnet.com. It’s also, according to the same source, something “to put up as security or collateral.” None of these words made a lot of sense to me the way they’re strung together by the Princetonians, so I poked around for a more rudimentary definition. One dictionary described a mortgage as a “type of loan used to secure property.” I could live with that.
Unfortunately Google also offered me about 20 related phrases to research, all of which had the word mortgage in them. Like adjustable-rate mortgage, fixed-rate mortgage, reverse mortgage, wraparound mortgage, mortgage liens, mortgage insurance…And I could look up these terms, not only in English, but in Chinese, Spanish, German, French, Italian, Russian or ALL LANGUAGES. Can you imagine the cacophony of that last one? I didn’t click on that because I thought my computer might explode. I also didn’t click on “Jumbo Mortgage,” because that just sounds like a death wish. I’d prefer a teeny-tiny-baby mortgage actually.
I did want to know more about “mortgage rates.” That’s a good one — everybody’s always asking about “mortgage rates.” That particular term refers to the interest rate that you pay on the money that you’re borrowing. As of the July Fourth weekend, California interest rates for a home mortgage were hovering around 5.31 percent on a 30-year, fixed-rate loan.
Speaking of our nation’s birthday, I have to say that government Web sites about home loans are remarkably lame. Here’s a typical entry from the Federal Reserve Board’s Web site: “You’ve been looking at houses for months and months, and you have finally found it — the house that’s just right! Now, you’re anxious to buy your new home, move in, and get settled. But you still have an important task ahead of you — getting a mortgage loan.”
Independent sites are better — even the really generic ones, like About.com, and the really huge real estate sites, like Zillow.com and Trulia.com. The best resources, though, are local and personal. By personal I mean breathing, as in on the phone or sitting across from you, or driving you around town to look at houses. Most real estate agents can recommend reliable, real-life lenders and brokers who can explain the local particulars of the real estate market. You should shop among these lenders (banks and private companies mostly) for a mortgage and for knowledge. Maybe it’s not as easy as shopping for shoes at Macy’s, but the more you look the more you learn.
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