Many first-time homebuyers are taking advantage of tax credits, the buyer’s market and purchasing real estate. Some, however, are surprised to find just how much mortgage rates can fluctuate as they search for the perfect house to buy. Even a half of a percent can end up costing thousands of dollars over the life of the loan. So, how can you ensure that you get the best mortgage rate possible? Start by understanding how and why mortgage rates change.

It is important to understand what it means to have an adjustable mortgage rate. The United States government’s Department of Treasury set the initial interest rate, but banks add to that rate, which is why people have different interest rates. An adjustable interest rate is one that changes according to the national rate, so it will fluctuate over time. With most mortgages, there are limits as to how much your rate can change annually and how much it can change over the entire life of the loan. Many homeowners are surprised, however, to learn just how much it can change, even from month to month.

So what can make your rate differ from another person’s rate or even differ from bank to bank? It starts with calculating your credit score. Credit score is based on a number of things, such as your age, your debt potential, if you have repaid loans in the past, and if you have any bad debt.

Most banks not only look at your credit score, but at your entire credit history. If you have not had any loans in the past, you may have a lower score than you think since you have yet to “proven” yourself. Having some debt can be a good thing, as long as you repay it on time every month. Before you go to the bank regarding mortgage, check your credit history to ensure there are no mistakes. You can do so for free and without any penalties once a year.

Your mortgage rate can also change based on the amount of money you have to put toward your down payment. Typically, banks want you to put at least 20% of the total payment down, but there are many exceptions to the rule, especially with so many grants and other programs available in almost every state. You can also put more money down. If you finance less, your mortgage rate will be lower in most cases, in part because you are not as big of a risk.

Your mortgage rate can also changed based on paying for your closing costs. Closing costs include insurance, title transfer fees, underwriting, and other miscellaneous fees associated with getting the loan and putting the house in your name. These fees can run from $2000 to $6000 or more, depending on the cost of the property and your location. If you or the seller pays for these costs, it should not affect your mortgage rate, but if you have to add them into the total, your rate could go up.

You can also pay for “points” as part of your closing cost. Each point is worth one percentage point, so by paying for them, you can save money over time. There’s a breaking point, of course, where it does not benefit you to pay for more points, and you have to have the money upfront to pay for the points, which can be hard for many people, especially first time homebuyers. Paying for points, however, can save you thousands of dollars.

If you are initially unhappy with your mortgage rate, do not worry, you probably will not be stuck with it forever. Your mortgage lender can change an adjustable interest rate, but you have the power to change it too in some cases. This is called refinancing, and although you have to pay some of the closing costs again when you refinance, if the national mortgage rate is down, it may make financial sense to get your rate recalculated. In that time, your credit score may have improved as well, which can help to make your interest rate even lower.

Before you sign any papers with a bank, make sure you completely understand your mortgage rate and how it can or will change over time. Some lenders are somewhat dishonest about how the mortgage rate works, they offer a very low rate initially, but that rate jumps very high after just a year or two. Read your mortgage contract thoroughly and ask questions if you are unsure about how your rate is calculated by your lender. Remember, there are multiple lenders in your area; find one that you feel comfortable with and one which makes sense for your situation.

Jason Nichols is a freelance writer who writes about the mortgage industry, often focusing on a specific topic such as mortgage rates.