Mind the ebbs and flows

Macroeconomic conditions put pressure on lenders' cost of funds and on secondary market demand for mortgages-and both factors affect mortgage rates directly. While you can't overcome economic trends, you can minimize surprises by staying informed.

I recommend: Review national mortgage rates for different loan types at MortgageLoan.com - which also features local brokers and lenders browsable by state. You can also review mortgage rate trend charts at Mortgage-X.com. Another good resource is HSH Publishers' weekly rate trend report and forecast.

Honor thy APR

The annual percentage rate (APR) is a yearly interest rate calculation that includes all upfront loan costs. It's useful because it allows you to compare two loan programs that may have very different upfront costs. These costs aren't included in a loan's stated interest rate.

I recommend: Review a more detailed discussion of APR at Answers.com. Use DinkyTown's calculator to determine APRs for adjustable-rate mortgages versus fixed-rate mortgages.

Check your credit score

Lenders use your credit score to assess the likelihood (or unlikelihood) that you'll pay back your debt on time. A lower credit score indicates a greater chance that you'll miss payments, or even default. The lender will therefore charge you a higher interest rate to compensate for that greater risk. On the flip side, a good credit score proves that you're responsible with debt, and earns you a lower rate.

I recommend: Before applying for a mortgage loan, access your credit report to verify its accuracy. If you want to know your exact credit scores, you can purchase them from FICO.

Be wary of the toll road less traveled

Option ARMs, interest-only mortgages, no-doc loans, and 100 percent mortgages are some of the more aggressive loan types out there. These programs may be appropriate for your situation, but they present more risk for the lender. Therefore, they'll cost you a higher interest rate.

I recommend: If you don’t qualify for a traditional conforming mortgage, look into FHA loans before choosing something more aggressive. If you must go with an unconventional mortgage loan, use a mortgage calculator to understand and evaluate the trade-offs.