When you are looking to buy a home, it’s important to treat the process of finding a mortgage like any other shopping trip. You want to find a mortgage in your price range, one that fits you well, and preferably one that’s on sale. Below are the steps that I took to find the right mortgage for my situation.

Know Your Credit Score
The banks and mortgage brokers will be using your credit score, at least in part, to determine the interest rate that they’ll charge you. By knowing your score, you’ll be armed with the same information that they have, and you will be in a better position to negotiate.

Know Your Rate
Knowing your credit score leads directly into this next point. Based on your score, you should be able to get a good idea of the rate that you can expect. I like to follow the average rates for the different loan types, which tend to be printed in the business sections of most newspapers on at least a weekly basis. While your credit score will affect whether you get a better or worse rate than the average, you can use the average as a starting point for determining what your rate will be.

Know Your Options
Even without getting into the exotic loans that have been making the news lately, there are still many different types of mortgages out there. The main decisions that you will have to make are whether to go with a fixed or adjustable rate loan and the length, or term, of your loan. Avoid negative amortization schemes, and watch out for loans with terms that look too good to be true.

Negotiate with Multiple Sources
This is perhaps the most important step that I took when finding my mortgage. By applying with more than one funding source, you get validation of the rates that each is offering you. If one offers a better rate, you’ll have instant negotiating leverage to try for a better rate with the others. If all of the rates are the same, then you can use the company that you feel most comfortable with. A good mortgage broker can help you through this process.

Evaluate the True Cost of the Loan
The cost of your loan is determined by more than just the interest rate. Other costs and credits, as well as your personal situation, will determine which loan is the most cost effective for you. In my case, I went with a slightly higher interest rate from the lender that was offering to pay for more of my closing costs. Knowing that I was going to pay my loan off early, I calculated the total cost of each option and found that the savings in closing costs outweighed the marginally higher rate.

The day may come when the home mortgage market is revolutionized by a P2P lender like Lending Club. Until that time comes, and we are forced to use traditional lending sources, I hope that my method of shopping for a mortgage provides some ideas that can save you money as well.

This is it. The great moment we have been working towards: expanding Lending Club beyond Facebook and making it available to anyone out there looking for better rates. We continue to enhance and support our Lending Club application in Facebook, but now, users don't have to be in Facebook to use our site.

As part of our public launch, we are unveiling new features that will benefit the whole p2p lending community, whether you are a Facebook user or not.

Here are some of the features we are proud to present:

Discover your connections: Lenders can now see how borrowers are connected to them, on an anonymous basis. Do they share a workplace, alma mater, association, hometown, or location? If so, LendingMatch™ accounts for connectedness among members to create diversified portfolios with higher levels of connections.

Invite your contacts, add more connections: We have enhanced our referral program to allow users to upload contacts from their Hotmail, Yahoo!, Gmail and AOL Webmail accounts. The more people you add, the more money you make ($5 per contact who signs up), and the better our Lending Club community becomes.

Better Search: Lenders have more ways to find the loans that will really interest them: type a user screen name, a college, workplace, city, hometown, association or any other keyword of interest to you that may be contained within loan descriptions.

Borrower's Account: Borrowers will now see additional information about their loan listings. Once the loan has been issued, borrowers can track their payment history and other relevant information.

Take Partial Funding and Relist: Did you not get all the funds you asked for? Not to worry. Borrowers can now take any partial funding received upon the expiration of the loan request. Would you rather try again instead of accepting the partial amount? Borrowers can also relist their loans within 45 days of their original loan application, and they can update the loan title and description to make the loan more appealing to prospective lenders.

You will also notice our improved home page and navigation. Take a look at new data we have on our communities’ performance, top lenders, rate comparisons, and more. You can now see where our lenders and borrowers are on the map.

Continue sending your comments, questions and recommendations. We love to hear them.

People-to-People Lending Service expands beyond Facebook, Invites Lenders and Borrowers to Come Together and Bypass Banks

SUNNYVALE, CA – September 13, 2007 - Americans are currently facing a credit crisis, and an increasing number are taking advantage of emerging alternatives such as people-to-people lending. Lending Club, the rapidly growing people-to-people (P2P) lending service that launched as a Facebook application in May 2007, today announced the public availability of its services with the launch of LendingClub.com. Lending Club connects lenders and borrowers based upon shared affinities, enabling them to bypass banks to secure better interest rates on loans.

Lending Club is the first in the P2P lending space to help people identify lending and borrowing opportunities using a proprietary affinity-matching technology that looks at factors such as where a person grew up, went to school or what they do for a living, and ensures that they are creditworthy (based on their credit score and other characteristics). The new site, LendingClub.com, introduces tools for building diversified loan portfolios composed of pieces of 20 to 30 individual loans and hosts a forum for financial experts to share their knowledge with the Lending Club community.

"During this credit crunch, people-to-people lending provides a valuable alternative, and keeps money flowing when people need it the most," said Renaud Laplanche, founder and CEO of Lending Club. "We promote responsible lending and borrowing with fixed-rate installment loans which allow borrowers to pay off 100% of their loan within 36 months. By cutting the banks out, both lenders and borrowers get a better deal and help each other."

Lending Club launched at the end of May exclusively as a Facebook application. Since then, the Lending Club community on Facebook has grown to more than 15,000 users who have loaned and borrowed more than $1 million among themselves. With the launch of LendingClub.com, the company brings its affinity-based lending services to the broader public, helping to connect borrowers and lenders the same way it did within Facebook.

Lending Club's proprietary technology, LendingMatch™, helps lenders quickly identify the best loan opportunities based upon personal affinities such as geography, work place, education and associations. LendingClub.com's LendingMatch sorts among affinity criteria that includes 47,000 US cities; 1,000 companies; 500 government agencies; 6,300 colleges and universities; 1,600 national associations and other organizations; as well as thousands of Facebook groups and networks. The LendingMatch technology allows people to quickly discover previously unknown connections, enabling them to borrow and lend money among trusted sources and rapidly build diversified portfolios.

The new site also includes "Better Rates Together," a blog community that features expert advice on P2P lending and personal finance.

Lending Club is available to individual borrowers with credit scores at or above 640. Using Lending Club, borrowers can apply for personal loans of $500 to $25,000 to be funded by one or many individual lenders. To date lenders have funded 90 percent of all approved loan requests. Lending Club handles user authentication, bank account verification, credit checking, credit reporting, funds transfers and collections.

Lending Club recently secured $10.26M in Series A financing led by Canaan Partners and Norwest Venture Partners.

Lending Club launched on Facebook approximately 100 days ago and has just surpassed the $1 million dollar loan mark.

As the first financial service to ever launch on a social network, and one of a handful of Day 1 Facebook applications, we are pleased to see that Facebook has more than doubled its active user base to 40 million and that there are now 4,000 Facebook applications. We checked in with Facebook on our progress and are appreciative of their continued support:

“Facebook Platform was designed to enable innovative business opportunities for all application developers. We're pleased to see Lending Club, one of the first Facebook applications, leveraging the social graph to build a successful business around Facebook Platform.”

Dave Morin, Senior Platform Manager for Facebook

During this credit crunch, we have received a few questions about the credit quality of our borrowers. Lending Club borrowers all have prime credit due to our requirement for a minimum FICO score of 640. Our experience to date shows the value of prime borrowers, as our average FICO score on issued loans is 704 and we have not had any defaults on qualified loans.

From an interest rate perspective, our average interest rate is just over 11%.

We are still seeing a considerable amount of bicoastal activity, with California leading the lending states and Florida leading the borrowing states.

Designer coffee is expensive. All of us know it, but oh my, it's so delicious. I'm not a huge coffee drinker, but I don't have a problem shelling out quattro dolari every once in a while to get a white chocolate mocha with hazelnut. However, some people drink it much too regularly; for example, my friend from Seattle has 2-3 cups of (expensive) coffee a day. Why would people spend this much every day for a drink?

The price for a cup of coffee wasn't always $4 — it used to be much closer to $1. But the boutique coffee places don't just sell coffee, though — many of them sell an experience. Most coffee shops don't have happy workers, comfortable chairs, hip music, and Internet access — Starbucks and other establishments have brought these amenities to the masses and made drinking coffee a lifestyle. By making coffee so fun and so cool, they created an addiction. This addiction isn't just to caffeine; it's to the coffee experience.

Unfortunately, the price of this addiction can be very high. A $4 cup of coffee is $120 over the course of a month, and almost $1,500 over the course of a year. That's more than the price of an iPhone and service! Small, individual costs can quickly add up to become very expensive.

At Lending club, we aren't recommending that you get rid of your coffee enjoyment altogether. Just take it in moderation. Cut down from 7 days a week to 2 days a week, and the yearly cost will be reduced from $1,500 to $416. Much more reasonable. Take some time and look at the small expenses you have — is there a way for you to reduce and replace them? You might find that, like cutting back on caffeine, not only is the result better on your wallet, but also better on your health.