When a first-time homebuyer hears the word “mortgage,” they don’t often think of it as a product. The idea they can comparison shop for one seems strange — isn’t loan qualification based on the same criteria? The truth is that the price and terms of a mortgage are often negotiable and vary lender by lender. In fact, homebuyers who don’t shop around pay an extra $300 more per year and thousands more over the life of the loan. Comparison shopping isn’t strange, it’s a necessity — especially before such a significant commitment.

Comparison shopping for a mortgage isn’t common. According to the Consumer Financial Protection Bureau, only 30% of American borrowers look at more than one lender for a home loan. In the next 10 years alone, it’s expected that Millennials are set to purchase 10 million new homes. This wave of first-time homebuyers means that many homebuyers will overpay for their mortgages.

As you shop around for a mortgage, below are the main points to keep in mind and the mistakes to avoid as you secure an affordable price and attractive terms.

Why is it important to shop around for a mortgage?

Before you begin the process of comparison shopping, a little context will help. There isn’t a standard set of rules or offers among all mortgage lenders. Each lender sets its own underwriting guidelines, fees, and interest rates. Bottom line: You may find a better deal with one lender than with another.

To start, you’ll want to find a mortgage lender that offers a good interest rate. Changing rates have a compounding impact over time and even a slight increase like 0.5 percent cost a considerable amount of money over the life of a loan. It’s also important to note that interest rate type matters too. An adjustable-rate mortgage may rise at some point in the loan term and increase your monthly payment. Fixed-rate loans by comparison won’t change.

There are also other factors that will influence your final decision beyond interest rates. Consider the following when comparison shopping lenders:

1. Points. Fees that have a link to your interest rate. Usually, the more points you pay, the lower the rate.
2. Fees. Assorted fees such as loan origination and underwriting fees, broker fees, etc. Many are negotiable.
3. Closing costs. The costs associated with closing your loan. The lender or broker should have an estimate if you ask them.
4. Down payment. Some lenders require 20%, though others may require as little as 5%. A lower down payment will likely require private mortgage insurance (PMI).
5. Private mortgage insurance. PMI is an additional cost added to your mortgage to protect the lender in case of borrower default when the loan down payment is low.

If you have questions about what you’d qualify for, you can consult a lender directly about the details of the mortgage.

It’s more than just interest rates

Before you meet with lenders, it’s best to be prepared. Asking the right questions (hint: they should go beyond interest rates) allows you to learn the most about your options. The questions below are a good place to start.

1. Do you communicate with clients in person, or through text, emails, or phone calls? How quickly do you respond?
2. What lender fees am I responsible for at closing? Can any be waived or rolled into the mortgage?
3. How long is your average turnaround time for pre-approval, appraisal, and closing?
4. Does buying discount points to lower my rate make sense?
5. What are the down payment requirements?

When you have the relevant information, it’s easy to make an informed decision and choose the mortgage that’s right for you.

How do you find the best mortgage lender?

A simple search online is the easiest way to locate lenders. Though, don’t underestimate asking friends, family, or real estate agents for their recommendations. Similarly, look out for lenders with high ratings. If other homebuyers feel positively about their experience with the lender, they’re a far better candidate than another with poor reviews.

Keep in mind any rates you see online are just estimates — you may pay more depending on your situation. You can use your research as leverage when negotiating your mortgage rates and could improve your chances of finding the most affordable mortgage for you.

Also, ask each lender about the earnest money deposit. Most mortgage lenders require this to start the loan process, and under certain circumstances, they’ll return it. If they can’t specify those circumstances, you should look elsewhere.

Before you meet with lenders

First, review your credit report — Equifax, Experian, and TransUnion legally must provide a free copy of your report once every 12 months. If there are any issues on your report, it’s best to resolve those before reaching out to lenders.

Next, review the different types of mortgages to see which is ideal for your financial situation. From conventional loans to government-backed loans like FHA and VA to interest-only mortgages to other hybrid and specialty types, you’ll have no shortage of options when shopping around. Also, decide if you want an adjustable-rate mortgage or a fixed-rate mortgage.

As you evaluate the various loans, give thought to which will work best for you. An FHA loan may appeal to you with its minimal down payment and credit score requirements, or if you’re a veteran or active-duty servicemember, then a VA loan may interest you. There isn’t a one-size-fits-all solution.

Should you shop around for a mortgage?

Yes — comparison shopping for a mortgage can mean more money in your pocket. Start with some basic research and talk to lenders. Once you have a foundation of planning and preparation, you’ll feel confident in your choice and save you money in the process.