So, I am not sure if this actually a dumb question or not.

What is the exact timing of choosing actions and spending fatigue?

I question this because currently we are playing that the heroes can spend fatigue before they choose their actions for the turn. This seems very powerful to me but as I am reading the rules on spending fatigue for movement I do not see a problem with this.

During his turn, before or after resolving an action or during a move action, a hero may suffer fatigue to gain movement points. (page 8, core rules)

Is this correct or am I missing something somewhere?

You're correct in the reading. Heroes can spend fatigue for movement points at any point as long as it is during their activation. It's pretty powerful, but it can be overused. I've found some players burn out their fatigue into a position and then not be able to get out or activate their heavy-hitting abilities.

"During your turn" means "during the perform actions phase (anytime after equipping gear but before your end of turn) but not interrupting anything but a move action."

The order is entirely fluid. A hero could suffer a fatigue to gain a movement point, attack, spend the movement point he gained with fatigue, then search. He could attack, search, then fatigue movent points..

Okay, Thank you. I just wanted to make sure I was playing correctly.

It is very powerful, but as you said can also be a trap if the heroes are not careful with their expenditure.