Finally, lenders may try to make up the difference by requiring the consumer to purchase home insurance through them, rather than allowing them to shop around for competitive rates. Provided there are no requirements or penalties attached to a low interest rate, it can be quite advantageous for a consumer to shop around before making a final decision on a lender.

The prospective homebuyer will also need to make a decision between a 15 year mortgage and a 30 year mortgage. Both have advantages and disadvantages.

With a 30 year mortgage, the consumer is tied down to a payment for a much longer length of time. The payments are often smaller, but only because they are being spread out over a shorter period of time. In addition, interest rates may be slightly higher with a 30 year mortgage because the lender is going to be at risk for longer.

Fifteen year mortgage payments are almost always larger than 30 year mortgage payments, because the loan is being paid off in a shorter amount of time. While the monthly payment difference between a 15 year and a 30 year mortgage may not seem that substantial, when viewed in terms of long term, it becomes tremendously important. A 15 year mortgage at a low interest rate can amount to a huge difference in savings.