Mortgage rates are intricately tied to the health of the overall economy as well as consumer demand for home loans. Two of the most important factors are the activities of the Federal Reserve Board and Fannie Mae.

The Federal Reserve board sets interest rates for the overall economy and this in turn affects the type of mortgage rates that are offered to consumers. Fannie Mae buys your loan on the secondary market and this frees up the cash from mortgage lenders so they can offer additional loans to more people. This also has a major impact on the type of mortgage rates that are offered to consumers.

Clean credit is the best
On an individual basis, nothing trumps good, clean credit. If you have excellent credit, or even good credit, you will find that the mortgage rates that are being offered to you will always be at the market rate or below the market rate. The mortgage rate is what you pay for borrowing money.

If a bank or credit union thinks that your financial history shows that you might have some trouble paying back the loan, then the rate will be very high. A solid payment history and a clean credit report is the best way to show them that you can handle this type of responsibility.

Comparison shop for loans and rates
Comparison shopping is another way to get access to great mortgage rates. Today, you can compare your local bank, against a credit union, and against a national mortgage company.

Just go online, search for a few lenders and you can easily find all of the information you need to get a preliminary quote from them. There are also many sites out there where can enter your zip code and get a snapshot of the mortgage rates being offered in your area.

If first deal is not comfortable for your budget get a few more quotes
Real Estate is a very fluid industry, so dont be tempted to accept the first deal that you see. Also, keep in mind that the mortgage rate is not the only factor that will affect how much money you pay out over the life of the loan. You should also pay attention the points, origination fees and other broker fees that will be due at closing.

You can also qualify for a much lower mortgage rate by increasing your down payment. Anything that shows that you are able to handle your debt and pay back the money in a reasonable time will have an effect on how much you pay for a home loan.