When you are ready to shop for a loan, you can work directly with a lender or with a mortgage broker representing many individual lenders. Direct lenders are lending their own money, have in house programs and make the final decision on your application. Mortgage brokers are intermediaries who represent many lenders and loan programs from which to choose.

If you have special financing needs or want to shop the market for the best deal, an experienced broker may be able to find the best loan for you.

Along with shopping the source, you'll also have to shop the total cost of the loan, including the interest rate, fees, points (each point is one percent of the amount you borrow), prepayment penalties, the loan term, and a host of other items.