To secure a cost-effective mortgage in the United States, prioritize improving your credit score, shop extensively for lenders, and explore loan programs with lower fees. Start by correcting errors on your credit report and paying down debts to boost your creditworthiness, as a higher score (700+) typically qualifies for lower interest rates. Compare offers from multiple lenders, including banks, credit unions, and online mortgage companies, to leverage competitive rates and terms. Consider fixed-rate mortgages for stability or adjustable-rate mortgages (ARMs) for lower initial payments, though ARMs may rise over time. Additionally, aim for a down payment of at least 20% to avoid private mortgage insurance (PMI), which adds 0.5%-1% to annual costs. Research government-backed loans like FHA, VA, or USDA mortgages, which often offer lower down payments and favorable terms.

The effectiveness of these strategies is supported by data. A higher credit score directly correlates with reduced mortgage costs: borrowers with scores above 780 pay approximately 0.25% less on average than those with scores below 620 (Federal Reserve, 2022). Shopping across lenders can save thousands; the Consumer Financial Protection Bureau (CFPB) found that obtaining at least three quotes reduces closing costs by 15%-20%. PMI elimination via a 20% down payment saves $50-$100 monthly on a $300,000 loan (Bankrate, 2023). VA loans, requiring no PMI, save borrowers $1,000 annually on average (U.S. Department of Veterans Affairs, 2023). Fixed-rate mortgages remain popular due to their predictability, with 75% of borrowers choosing them despite slightly higher initial rates (Mortgage Bankers Association, 2023). Combining these steps ensures affordability and long-term financial security.