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9 Thou shalt not change bank accounts.

10 Thou shalt not cosign a loan for anyone.

To simplify the loan process, supply your lender with copies of your last three bank statements and last three federal tax returns.

Comparing loans

The best way to compare loans is to determine the total cost of the loan over the life of the loan:

1 Start with the amount the bank charges you upfront in loan origination fees, discount points (interest you pay upfront — typically, a percentage of the loan, to lower the interest rate), and other fees.

2 Multiply the monthly payment times the number of months you plan to pay on the loan.

3 Add the two amounts to determine your total payment.

4 Total the amount of each payment that goes toward paying the principal of the loan. (Your lender can tell you how much of each payment goes toward principal.)

5 Subtract the total you determined in Step 4 from the total in Step 3.

Suppose you’re considering two loans, each for $100,000. You plan on using the loan to buy and renovate a home over two years and then sell it and pay off the remaining principal on the loan. You have a choice between a 30-year, traditional fixed-rate mortgage at 6 percent and a 30-year, interest-only loan at 5 percent. Look at the 6 percent, fixed-rate mortgage first:

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