Look at mortgage shopping the same way you would when shopping for clothes. Take slacks for example. Every pair of pants will fit a bit differently. Some will be tight with little wiggle room, and others will be baggy and perhaps a little more comfortable. The same applies to mortgage loans.
It's important to look at different combinations of loan offerings. Consider discount points, closing costs, 15- versus 30-year loans and even ARMs. Ask your lender for a matrix of loan possibilities, and weigh all of your options. It is possible to tailor your loan to fit your budget.
The big drivers that will affect your loan choices are: available cash over and above the down payment and how long you plan on staying in the house.
Here's an important tip: Don't fall into the trap of refinancing from the beginning of a 30-year note. That just extends the overall life of the loan and will have you paying a lot more in the end. Say you have been in your house five years. On a new 30-year mortgage, ask the lender what the payments would be if you paid it off in 25 years, which takes your first five years of payments into account. Then budget that amount into your monthly expenses.
A note about points: Discount points on a mortgage are essentially prepaid interest. The benefit of paying points is better the longer you are in your house. If you feel that you are going to be in your house a long time, it might make sense to pay points upfront. Keep in mind, though, that with really low interest rates, points might only bring the rate down an eighth of a percentage point.
Try to shop for a mortgage that will closely fit your finances. Learn about discount points, closing costs and loan terms. You will find a loan that is tailored to your needs.