Actually, finding the lowest mortgage rate is easy:  Just go ahead and call any of the thousands of unscrupulous mortgage brokers out there- you know, the ones who like to advertise online with rates that are too good to be true.  Some of them- occasionally- will actually provide the rates they promote, but watch out for those closing costs!

The first thing you should know:

Mortgage rates change almost every single day.  Mortgage companies know this, so they choose to advertise the lowest rate they possibly can, but alas, when you call them, that rate "is no longer available."  Ditech.com does this all of the time.  How can they advertise a 5.875% interest rate during production of the commercial, without knowing what rates will be at the time you call?  They call this "market change"; I call it bait and switch.

An ethical company will not advertise their rates when they really have no idea what rates will be once the commercial airs.  It just gives the borrower false hope; they call; a smooth-talking salesperson snares them in and get's a packet out "right away."

Tricks lenders play:

Mortgage rates are only half of the equation.  One must be careful about mortgage company fees.  What good is a 5.75% interest rate if you have $8000 in closing costs and you end up moving in 5 years?  Take that $8000 and divide it by 5 (years) and tack that onto your payment.  That's REALLY what you paid.

Also, mortgage lenders can charge you for anything.  Let's say you have a $100,000 mortgage that you need to refinance.  The lender advertises "no points" and an interest rate of 5.875%.

That's the best deal you've found.

Not so.  This lender promised you "no points" and that was true.  What he or she didn't mention is the $1000 "broker fee", the $895 "processing fee", and the $400 "doc prep fee". 

So the lender was right!  You didn't pay any points!  Instead, you paid over 2 points (or $2000) in "junk fees" because you were so wowed by the "no points" advertisement.

The Honest Lender loses the deal:

Now, of course, you blew off the other lender who told you that there would be a "one point" origination fee on your mortgage loan.  You've listened to your friends!  You've heard the commercials!  Nobody should have to pay points!

Wrong.

The other lender- the one that you didn't want to deal with because of "the points"- was going to charge you 1% of the loan amount and that's it.  That would have saved you $1200, using the example above.

The bottom line when dealing with lenders: Who is offering the lowest rate combined with the lowest fees?  Don't get swept up by all of the lies that mortgage companies tell.  When shopping for loans, always compare apples-to-apples:  Find three lenders and ask all three of them for their best deal on a loan with "ZERO LENDER FEES." 

I don't recommend loans with "zero lender fees" (unless you are going to be in a home for a very short time), but this is the easiest way to compare lenders.  Because, I promise you, no two lenders will have the same fee structure.  That makes determining the best deal very difficult.

One last thing:  Since this is such a enormous financial transaction, please make sure that your lender is a member of the BBB and it wouldn't be a bad idea to contact your State Banking department to find if any complaints have been lodged against them, before you hand over all of your personal paperwork.