For even the smartest of "smart shoppers", the process of shopping for a mortgage can be a real challenge.  One major reason for that is the tremendous amount of information dissymetry between the shopper (you) and the shoppee (the loan officer).

No matter how much a person reads in books, newspapers, Web sites or blogs, home loans have a "personal" element to them that makes it hard to generalize a product or strategy. 

This personal effect creates the potential for tens of options that can cloud the "true price" of a home loan.

This is akin to buying a car where each "package" or feature changes what you're truly buying.  Just like you can't compare the relative value of pre-installed satellite radio to a tow-anchor, you can't always compare mortgage options.

But, versus shopping for an automobile, the stakes in shopping for mortgages are much larger.  You're not buying a $25,000 car -- you're buying a financing package that can be 10 times that amount, or more.

Comparison shopping for mortgages has its own rules and even the smartest shoppers are unaware of how they work.  That ignorance can swing the long-term cost of a poor decision well into six figures.

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Rule #1: Mortgage rates are in constant flux

Unlike with consumer goods such as cell phones and televisions -- financial instruments do not retain their "price" day after day.  Just like stock prices change day after day, so do mortgage rates. 

There are other rules that you should pay heed to as well.  I've listed them below.

Rule #2: Do your shopping in one day

Because mortgage rates change daily (and sometimes more often than that), be ready to shop and commit in one day.  Reputable loan officers should be able to issue a Good Faith Estimate complete with rates and charges shortly after "interviewing" you.

Rule #3: Compare identical mortgage products 

Comparing a fixed-rate mortgage to an adjustable-rate mortgage is like comparing a desktop to a laptop.  They both serve the same function, but have completely different purposes.  The same is true for variances of fixed rate and/or ARM products

Rule #4: Don't keep secrets from a loan officer

Loan officers need to know exactly what qualifications you bring to the table in order to give you an accurate and fair quote.  If you're not willing to share valuable information including income, assets, and/or social security numbers with the loan officer, you can't expect the loan officer to take you seriously.  And let your credit scores get checked -- if you're shopping on the same day, the credit bureaus protect you.

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There's more to it, of course, but this can be start.

Be smart when comparison shopping for mortgages and understand that financial instruments do not operate like digital cameras or mattresses.  Prices change daily and your monthly payment is not set in stone until your rate is locked.

And, when all else fails, ask a friend for a trusted referral.

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Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.