Mortgage rates are always based upon the prime lending rate, plus a certain percentage point (depending on the lender). Shopping to get the best rate is a good idea, but don't pin all your hopes on it, because a low rate will benefit you little, if you cannot close the mortgage and lock the rate. Mortgage rates vary according to the plan that best suits you.

An important point to keep in mind about rates is the fact that a quote given over the telephone is not final and unchanging. By the time you finally purchase a home, you may find that the rate has changed.

Again, you must remember that a low rate needs to be locked in order for you to benefit - because in the open market interest rates fluctuate daily.

Another point is the fact that prime rates are only available to prime clients, that is, those who have clean credit.

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Next: AFTER FINDING A LENDER