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The best mortgage rates are still at historic lows heading into 2016. Mortgage loans are the best option for those individuals seeking to buy a home.
Following are a few tips to obtain the best deal on a mortgage finance. If you’re ready to get going in your search for the best mortgage rate, here are four tips that will ease your search.
 

• Compare rates

When you find the home of your dreams, chances are your real-estate agent will direct you to certain preferred lenders that he or she has worked with before. Take that recommendation with a grain of salt. Remember, your agent’s primary concern might be to close your deal quickly, but securing a mortgage is a complicated process, particularly if you’re a first-time buyer. Speed isn’t everything, and you need to look around for the best deal. Whether you want to keep your business with a local lender or are considering working with a big-name company, be sure to look at rates online so you have a good comparison.
 

• Polish your credit score

Keeping your credit in top shape is paramount, especially if you’re applying for a conventional loan. The higher your score, the better your interest rate and the more loan choices you’ll have. For example, according to the rate calculator at myFICO, I could pay as little as $1,305 a month on a $300,000 home loan in Ohio with a credit score higher than 760. My interest rate would be a hair under 3.3%. With a score of about 680, I’d be paying $1,372 a month at an interest rate of about 3.6%. And with a score of 620, I could be paying as much as $1,581 a month at an interest rate of more than 4.8%. With the lower credit score, I’d be paying $99,146 more in interest over the life of the loan.
 

• Beef up your down payment

It can be painful to save enough for a down payment, but paying more up front can help you nab a better interest rate and save you money as you pay down your loan. It may also save you the cost of mortgage insurance, which many lenders will charge if you have a lower-than-normal down payment. If I put the recommended 20% down, or $40,000, on a $200,000 home in Tennessee, I’d pay as little as $730 a month in mortgage payments, according to this Bank of America calculator. This assumes a 3.7% APR, solid credit, and a fixed 30-year loan. If I could only scrape together $25,000, I’d suddenly be paying $798 a month. And then there’s $70 a month in mortgage insurance, which I’d have to pay since I couldn’t put 20% down. That brings my monthly payments to just under $870.
 

• Consider how long you’ll be in your house
   

• If you know you’ll be in your home for a relatively short time before selling, looking at adjustable-rate mortgages can make more sense. That’s because you can take advantage of the ARM’s low initial interest rates, then sell the home before your rate begins to reset. Be absolutely sure you will only be in your home a short while. Many homeowners were banking on ARMs, but suffered rate increases when the value of their homes fell in 2008 and they were unable to sell.
   

• If ARMs seem like too much of a risk to you, look seriously at a shorter-term fixed rate mortgage. Your monthly payments will be larger, but you will nab a much lower interest rate. Ultimately, you’ll pay much less over the life of the loan with the added bonus of building equity much faster.
   

Finding the Best Mortgage Lenders

Taking out a mortgage can be a time-consuming, confusing, and even emotional process. For that reason, we encourage you to look beyond getting the best mortgage rates when choosing your lender. The top mortgage lenders will not only give you a competitive rate, but make the process as seamless as possible. Here are a few tips that can help you find the best mortgage companies.
 

Tip #1: Do your homework online

Harness the power of the Internet to give you a wider perspective than you can gain from family and friends. You can find reviews of the best home loan lenders with just a few clicks. As with all online reviews, remember to consider trends. A few very bad (or very good) reviews may be an anomaly, while dozens of good or bad reviews probably get you closer to the truth.
A particularly good place to look is J.D. Power and Associates’ annual mortgage lender customer-satisfaction survey. The 2014 survey, based on the experiences of thousands of real customers, found Quicken Loans had the most satisfied customers, followed by Bank of America, Chase, U.S. Bank, and USAA. Criteria included how satisfied customers were with application and approval; whether the closing process was relatively quick; and whether the lending agent was reliable and easy to understand.
 

Tip #2: Ask friends and family

Local lenders may not have as many online reviews, so asking around can be crucial in helping you find the best mortgage companies in your area. Conduct a quick survey of your family and friends, especially if they’ve recently purchased or refinanced a home. Ask whether they felt they understood the lending process, whether their agent was prompt and courteous, and whether they feel they got the best rate they could.
Of course, it may so happen that your real-estate agent steers you to a reputable company. Happily, this was the case with my most recent home purchase. My husband and I researched the lender our agent recommended and found nothing but good reviews. We’ve been satisfied customers ever since closing.
 

Tip #3: Take note of how you’re initially treated

If you call a lender for information and don’t receive it quickly, consider that a red flag.