Saving money when repaying a loan is one of the main concerns that many consumers have when shopping for a lender. This is especially important when looking for a mortgage loan, since the amount of the loan is going to be significantly higher and will be paid back over a longer period of time. The best way to save money on a mortgage is to find a loan that features a low interest rate, but these low rate home loans can sometimes be difficult to locate if you aren’t diligent. You can take advantage of the lowest mortgage rates available to you if you take the time to shop around and are picky about the mortgage loan that you eventually choose.

Research the Market

Before you apply for a mortgage loan, take the time to do some research and find out the state of the mortgage loan market. Interest rates fluctuate normally, and during times when the economy is in flux the rates may drop more than usual in an attempt to get more people to buy new homes. Read what economic analysts have to say about possible future trends in the housing market, and try to find out if any federal rate changes are expected to happen in the near future. This will help you to determine whether you are better off applying for a mortgage loan quickly or if you might be able to get a better interest rate by waiting just a little longer to see whether rates will drop further.

Maintain Your Credit

Months in advance of beginning the mortgage application process, take the time to focus on improving your credit. Make sure that you don’t miss any bill payments and try to pay more than the minimum balance if possible. Even if you have had credit problems in the past you still might be able to qualify for a decent interest rate by improving your recent credit history. If a potential lender checks your credit and sees that the past several months have been filled with positive reports from your various debtors then they will feel much more confident that you have turned your financial problems around than if there are occasional negative reports mixed in with the positive. Begin the process of credit improvement as far in advance of submitting a mortgage application as possible.

Make a Good Down Payment

The more you pay as a down payment on your mortgage loan, the more likely a lender will be to offer you one of the best mortgage rates that you can qualify for. If your down payment is large, this means that you’ll be borrowing less money from the lender and they will have less that they could potentially lose if you should fall behind on your payments or fail to repay your home loan in full. The fact that you were able to make a large down payment will also give them confidence in your ability to make the money necessary to be able to pay what you owe each month.

Decide on Fixed Rate or Variable Rate

There are two distinct types of interest rates which are available with most mortgage loans: fixed-rate interest and variable-rate interest. If your mortgage features interest at a fixed rate, this means that you will be paying the same interest rate on your loan regardless of any economic shifts or changes which might occur in national rates. A variable interest rate is just the opposite; the rate may change each year (or in some cases several times per year) depending on federal rates and the state of the local and national economy. If the interest rate that you are being offered is low, a fixed rate might be better in order to help you keep your low rate. If your interest rate is high, however, you might be better off with a variable rate that will likely decrease in the coming years.

Shop Around for a Good Deal

The most important thing that you can do to take advantage of some of the lowest mortgage rates that might be available to you is to shop around at different lenders and find out who has the best deal for you on a home loan. Visit a number of banks, credit unions, and other mortgage lenders in your area and request interest rate and loan term quotes from each. Compare the rates that different lenders offer in order to find out who has the best overall interest rate for your new home loan. Take the time to make sure that the loan you want has agreeable loan terms, though, as a low rate won’t do you much good if it’s just an introductory rate or if the loan agreement is filled with hidden fees.