The higher the rates the more you are paying. Interest rates are the most costly  expense for a borrower. There are many factors play a role in lowering your rates and saving money. Let us see and learn about these factors:

Credit Score tells the lender your credit worthiness. There are ways to improve your credit - also known as FICO score. This is one of the most important factors to lowering your mortgage payment. Building a better credit is mostly knowing how to do it and follow the rules that impact your credit score. . We will have another article just about improving your credit. 

The strength of your credit report depends on few factors: timely payment, the ratio of unpaid balance comparing to your total credit limit, your monthly debt payments, late payments, disputes, etc.  A clean credit report with a higher score gets a better interest rate.

Down-Payment the more down-payment means less risky the mortgage for the lender. So, you get a better rate. But this option is only for borrowers have enough savings for a large down-payment. You should not be thinking of borrowing money to increase your down payment. But gifts can help you, if you have that option. Please note that putting at least 20% of the property purchase price would help you to lower your rate and you don’t have to pay any PMI or private mortgage insurance. 

Down payment is one of the most important factors you should think about when you were buying a house. the more down payment you have the better for you. Paying mortgage insurance  May limit your ability of buying power. For example if you are paying 200 every month on a mortgage insurance that means you are paying 200 less towards mortgage payment. The lender would calculate this  payment to qualify you for the maximum loan amount. As a result of this many borrowers with less than 20% down-payment would not qualify as much as a borrower with 20% down-payment would qualify for.

if you have lower down-payment you are not without options. Depending on your income and creditworthiness you might qualify for incentives available for first time home buyers. There are some loan programs can help you to do that. For example some conventional loan programs have 3% down payment .The FHA Loan program has only 3.5% down payment to buy a house. 

These loan programs are also designed to qualify a buyer easily.  Not only that, you can also have an option of getting down payment assistance. some of those down payment assistance programs allow you to use this money for your closing costs and down-payment. You do not need to pay back  the money. These grant programs are available mostly for the primary residence. It means with a low down payment you also have great options too. Some lenders might allow you to provide only 1% down payment along with lender's  2% down-payment assistance. Not everybody would qualify for this program and not all lenders have  this down payment assistance program  all the time. There are some nonprofit organizations and government agencies provide down-payment assistance programs for the first time home buyers.

Points 

A borrower can buy down points. For example, if you are getting a 4% rate , the lender might give you an option of paying $2000 to get 3.75%. The way it works is that the lender is getting a lump-sum payment in return for giving a better rate. The option is most effective when you don’t qualify for the mortgage just because you payment his higher. You can also use this option to increase your purchasing power. For example, normally if you qualify for a house price of $400,000 and you find a house that you like which is $450,000 . In that case buying down points to lower the  rate might allow you to buy a house for more than you normally would qualify for.

It is always a good idea to consult with a loan officer  to discuss your scenario.

Shopping 

Every bank or lender is different. One lender might be good at FHA pricing , another might be for a conventional loan or a coop mortgage.  As a broker we deal with more than 40 banks. When a client comes we find the best option for that person that matches his/her scenario.  During this lender  matching process with the borrower , we consider few things which are   a borrower's credits , down-payment, property location, type: primary , secondary or investment,  and  also borrower’s income and debts. Usually , a borrower gets a minimum of 3 best options to choose from out of all these lenders.