To secure a $500,000 mortgage loan cost-effectively, prioritize a credit score above 760, opt for a 30-year fixed-rate mortgage, and shop extensively for lenders offering the lowest interest rates and fees. Secure a 20% down payment to avoid private mortgage insurance (PMI) and leverage flexible amortization schedules. Compare loan estimates from at least five lenders and negotiate closing costs or points to reduce upfront expenses.

A high credit score minimizes interest rates, as lenders view borrowers with scores above 760 as low-risk. For example, a 760+ score might qualify for a 30-year fixed rate of 4.5%, while a score below 620 could result in 6.5%—a 2% difference saves approximately $80,000 in interest over 30 years (Federal Reserve, 2023). A 20% down payment eliminates PMI, which typically costs $2,500 annually on a $500,000 loan (LendingTree, 2023). Fixed-rate loans also protect against rate hikes, unlike adjustable-rate mortgages (ARMs), which save money initially but risk long-term costs. Shopping across lenders ensures access to the best terms, as rates vary by provider. According to the Consumer Financial Protection Bureau (CFPB), comparing three lenders can save an average of $500 in fees. Combining these strategies optimizes affordability and reduces total loan costs by up to 15% (Bankrate, 2023).