Look at loan programs and rates offered by several different lenders. If you find a lender that offers a 6.25 percent rate when all the others charge more, you'll save in interest over the life of a 30-year.

Comparison-shop on line to cut your search time drastically. Work with a mortgage broker who arranges loans from many different institutions. Choosing a mortgage can take weeks if you contact several lenders yourself.

Be sure to compare loans thoroughly:

• Compare at least 6 lenders or mortgage brokers. One of them is bound to offer the loan that's best for you.

 

• It not all about interest rates. Getting a low rate is important, but you won't benefit from it if you have to pay too many up-front points and other fees.

 

• Understand how points and rates work. A point is prepaid interest, and each point you pay equals one percent of your loan amount. If you get a $100,000 loan and pay 3 points, that's $3,000 in points. The more points you pay, the lower the rate you'll get.

 

• How long will you keep the loan. If you're going to move in a few years, consider an adjustable-rate mortgage since you may be able to sell the house before the rate gets too high. If you plan to stay longer, a fixed-rate mortgage may be an attractive option because your rate stays fixed for the term of the loan.