I received solicitation for an interest rate below 4%, is this realistic?  

Lenders will advertise extremely low rates to get you in the door.  What they fail to tell you is that these are introductory rates, or temporary teaser rates.  They are usually not on a 30 year fixed term and if they are, there are probably astronomical fees associated with the loan in order to be able to offer this low rate. Most of these offers are in accordance with a 1 year ARM, in which your interest rate may change once a year or even monthly, depending on the type of loan.  
 
 

What Is PMI? 

Private Mortgage Insurance. PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.  PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a large down payment.
 
 

What Is an ARM and what are the benefits and pitfalls? 

With an adjustable rate mortgage (ARM) the interest rate changes periodically, usually in relation to an index, and payments may go up or down accordingly. 

To determine the interest rate on an ARM, lenders add to the index rate a few percentage points called the margin. The amount of the margin can differ from one lender to another, but it is usually constant over the life of the loan.  For Example: if the Index rate is 1 and the margin is 2.75 then your rate would be 3.75%.
 
 

How do I improve my Credit Scores? 

Call creditors and close out any credit cards you are not using.  Always make sure to make payments on time, especially debts associated with your mortgage.  Do not allow numerous lenders, finance companies, and/or credit card companies to pull your credit when shopping for homes, autos, or purchases that require financing. Shop around first and decide who it is you are going to do business with and have only them do a credit evaluation for you.
 
 

How can I improve my chances of qualifying for a mortgage?

DO NOT take on new debt.
DO NOT change jobs or line of work.
DO NOT lease or buy a new car.
DO NOT make late payments *especially* on your current mortgage or rent.
 

These are suggestions that will improve your chances of qualifying for the maximum loan at the best rate.  However, these suggestions do not guarantee you will qualify for a loan.  They are merely suggestions to follow during the home buying process.