Recently, the Associated Press reported that banks need to lend money more freely. But banks “lending freely” is what got us into this mortgage mess in the first place. Banks are tightening their standards, some, but they’re still advertising heavily for borrowers.

I’ve noticed that, even with all the attention to the mortgage market, new borrowers are no more educated than they ever were when they arrive at the bank. If you are considering getting a home loan, it is important to educate yourself– perhaps now more than ever, prior to meeting with the loan officer. You cannot rely on the broker to explain the fine print, as the mortgage crisis has taught us. Plus, many people find that it is difficult to understand financial issues without sitting down quietly and studying them. Those who are considering a loan can take a look online and get plenty of information about mortgages, amortization, rates, etc.

Once you have a basic understanding of how mortgage loans work, take some time to research the interest rates online. Even if you are going with an online service, compare a few and study the way the interest rates and low in terms would impact your payment over time. Look at both the way it affects your monthly payment, and the total you will pay over the life of the loan. You will find that lenders have a wide assortment of options for financing, and several different loan packages they can offer. By arriving at the lender’s office with at least some familiarity, you will be able to evaluate the rates he offers you more readily.

Ask your broker all the questions you need to about the details of the mortgage, the fees, the terms of the various loans, and any penalties they may carry. An example: Sometimes rates are lower, but they carry prepayment penalties, whereas the higher rates do not. Issues like this are the reason you need to ask, ask, ask.

Try to select a lender who is very upfront about his program’s fees and terms, and one who you feel you can communicate with. Most of all, don’t sign anything until you’re sure you understand all the terms.