When you're shopping and comparing for a mortgage loan there can be a lot of discrepancies between what lenders offer. Some may offer lower rates with strings attached, others can offer the same terms but with a much higher rate. Shopping around, comparing and negotiating are key skills in getting the type of mortgage loan with the lowest interest rate.

The first thing you need to do when getting a mortgage is to shop around to different lending institutions. There are many different places you can borrow from including thrift institutions, commercial banks, mortgage companies and credit unions. It pays to first determine how much you can afford to pay each month and your down payment amount before you visit a lending institution. Come to each lending institution with the same number, than way you'll be able to compare apples to apples.

Educate yourself on the various fees and add ons that lending institutions can use. Making yourself aware of these charges can help you find the type of mortgage loan with the lowest interest rate. Although a low interest rate may look appealing on the surface, there may be other factors to consider. For example, a low rate may be adjustable, meaning that it will fluctuate up and down. If you're considering an adjustable low rate make sure to ask about the terms of the adjustment. Will your monthly payment change or will the extra charge be added to your principal? How often is the interest rate calculated? These issues will help you determine whether or not that low rate is really a good deal.

Also make sure to ask if there are any ?points? involved with the mortgage. Points are fees that are paid to the lender or the broker for your loan. Points and interest rates are linked. If you pay more points, then you'll pay a lower rate and vice versa. You can find information about rates and points in your local newspaper. Also, make sure to ask your lender to put the points in monetary terms. Understanding the dollar amount of the points will help you see exactly what you have to pay.

There are also fees to consider like loan origination or underwriting fees, broker fees and transaction, settlement and closing costs. Your lending institution should provide you with an estimate of the fees. Fortunately for you, most of these fees are negotiable. Always ask for explanations of fees that you don't understand.

All of this may seem like a lot of work. But in order to find the type of mortgage loan with the lowest interest rate, it's definitely worth it. By understanding any fees or charges associated with your loan, you'll be able to determine if that low rate is really all that it's cracked up to be.