Establish a Baseline: Contact a lender to get your credit score and talk about your loan options. The first lender can help you to compare FHA and conventional financing options, as well as various loan terms so you can make an informed decision on which loan program and term that you want before you contact other lenders.

Raise Your Credit Score: Conventional lenders charge a higher interest rate for lower credit scores. Raising your score can help you qualify for lower rates. Most lenders require a minimum credit score of 620 to 640. Typically, a credit score of 740 or higher puts borrowers in the best tier for a conventional loan program.

Decide How Long You Will Keep the Loan: This is very important, because it can change the decision you make on the type of loan you choose. If you are a person who doesn't take risks, then you may choose a fixed rate home loan for maximum safety. But, if the property will only be kept for a few years, you may be perfectly fine with a 5/1 hybrid mortgage and pay about 1 percent less in interest. Shorter term loans can get you a lower rate. For instance, a 20-year fixed mortgage is about 1/8th percent lower than the interest rate for a 30 year fixed and a 15 year fixed rate loan is 1/4 to 3/8ths percent lower than a 30 year fixed rate loan. So, you can save thousands on interest payments with a shorter loan term, although you must make sure that you can handle higher payments.

Contact Several Financial Institutions: Interest rates are always fluctuating for many reasons. Sometimes, lenders offer a promotion to entice borrowers.

Make a Larger Down Payment: The larger your down payment, the more equity you have the less risk you pose to the lender.

uy a House: Condominiums are considered a riskier investment because they dropped in value more than other types of homes during the housing crisis. So, mortgage rates are usually around 1/8th percent higher than for a single-family home. However - if you make a down payment of at least 25%, that interest rate added on will likely not be charged.

Ask About Fees: The various fees associated with a loan are one reason why you shouldn't comparison shop solely based on the best advertised rate. Sometimes an advertised rate can be lower than all the rest because of all the fees associated with it. Some lenders blend all their fees into a loan preparation fee, while others separate them out, so be sure to ask for the total amount it will cost to close the loan. Usually, a mortgage with higher fees should have a lower interest rate.

Shopping for the best mortgage rates and the best overall mortgage for you and your mortgage broker isn't an easy task, but these tips should help to steer you in the right direction.