Once you've found the perfect home, you'll need the perfect loan to pay for it.

You already know what you want: the lowest interest rate and smallest monthly payment possible. And you want to get it from a lender who is easy to work with and who will not hit you with any last-minute surprises or hidden fees.

Here's a simple, step-by-step plan to find and get the best possible mortgage.

Step 1. Decide what type of loan is right for you.

Before you even start looking for a lender, you have to know what type of loan you are looking for. There are two basic types: fixed-rate and adjustable-rate mortgages, known as ARMs.

With a fixed-rate loan, the basic monthly payment -- principal and interest -- stays the same for as long as you have the loan. (Remember, though, that taxes, insurance and any association dues or assessments included in your mortgage payment often go up.)

With an ARM, the interest rate can and will change. When and how it changes depends on the type and length of the ARM you choose.

There are one-year ARMs, where the interest rate stays the same for the first year and then can change every year afterward based on where the index rate is on a certain date. There also are three-year ARMs, five-year ARMs and so on.

The charm of an ARM is that the initial interest rate is usually lower than that of a 30-year, fixed-rate loan.

In general terms, one of the main factors you should consider when looking at a mortgage is how long you can reasonably expect to stay in a house. If you know you will be transferred in two years, then a two- or three-year ARM makes sense. You'll be able to take advantage of the lower rate while you're there.

If you plan on living there for the long haul -- say, 10 years or more -- a fixed-rate loan is usually your best bet.

To help choose the best loan for you, take a look at our more detailed report on different types of mortgages.

Step 2. Find lenders offering the best deals.

If you have good credit, our extensive database of the best mortgage rates allows you to compare loans being offered by scores of lenders in your area.

Click on "Rate" under the heading "Current Quote" to automatically rank all of the rates from cheapest to most expensive.

Then look at the fees each lender charges for making the loan. The best deals are usually those that offer the lowest interest rate with fees of $1,000 or less.

If you have bad credit, it's very hard to get a mortgage right now. Your best -- and in many cases only -- option is to qualify for a federally-backed loan program.

To learn more about that, go to our advice on the best mortgages for subprime borrowers.

Step 3. Create a list of finalists.

Pick two or three lenders that seem to offer the best deals.

If you've been preapproved for a loan -- and that's one of the first things you should do before you even begin looking for a house -- that lender should be a top candidate for this list.

Also talk to friends and family members, even a real estate agent, to see if they've had such a great experience with a bank or mortgage company that they'd recommend it to you.

You should also tell friends and family which companies you're considering. Even one bad experience is enough to scratch a lender off your list.

Step 4. Contact the finalists for a personal quote.

Call or e-mail at least three of those lenders for a quote -- interest rate, fees and discount points -- that takes into account the house you want to buy, your down payment, credit history and debts.

Be honest in what you tell them. You want as much assurance as you can get that you'll qualify for the deal you're expecting.

There is nothing wrong with seeking quotes from four or five lenders. It's your choice. You determine how much time you want to spend looking for the best loan possible -- a loan you probably will be living with for years to come.

Step 5. Consider how you and others feel about the lenders.

When choosing a house, the mantra is "location, location, location." In lending, it's "reputation, reputation, reputation."

After you've seen the numbers, evaluate the loan officers you're speaking with and the companies they work for.

Does dealing with a national company over the phone or Internet bother you? Are your e-mails and phone calls promptly and courteously returned? Or would you feel better meeting face-to-face with a loan officer working out of a local bank or mortgage office?

Are you comfortable talking to them about your finances, even the messy parts like the very black marks and minor smudges on your credit history?

Do you get specific answers to questions? The more vague the response, the more nervous you should become.

Google the lenders you're considering to find news stories, consumer groups or blogs that discuss their service and business practices. Check with the Better Business Bureau, too.

Ask for references.

Call those previous customers. Ask if they're satisfied with both the deal and the way they were treated. Were there any last minute surprises, demands or delays? Would they borrow from that lender again?

Step 6. Choose your lender and apply.

Pick the lender that offers the best combination of price and service and apply for a loan.

This is where you'll have to start pulling out the checkbook. Most lenders charge a nonrefundable application fee that can range from less than $250 to as much as $500.

Even if you choose the bank or mortgage company that preapproved you, there will be another application. Here's a look at the questions you'll be asked and the information you'll need to complete the forms.

You'll also be asked for a copy of your purchase agreement and to verify your income, savings and debts with bank statements, check stubs and many other documents. Here's a checklist of the paperwork you'll need.

The lender also will want to see proof that you have homeowners insurance effective the day you close on the house. So you'll need to buy a policy and send a copy to your loan officer. Find out more by checking our report on all of the insurance decisions you'll face.

Step 7. Lock in a rate.

Interest rates fluctuate, and most lenders won't guarantee what you'll pay until 30 or 45 days before closing. So sometime between when you apply and get final approval, you can lock in the rate being offered at that time.

If interest rates go up before your purchase closes, you're protected.

Some lenders will offer a one-way lock or float-down. You are protected if the rate goes up, but if the rate goes down, you get the lower rate. With most lenders, however, you've got to pay the higher rate you locked into.

Step 8. Get the commitment letter.

Your sales contract will set a deadline, usually about a week to 10 days before closing, for winning final approval for your loan. If you don't have it, the seller can terminate the sale and try to keep your earnest money. (That's the cash you are usually required to give the seller's real estate agent when your offer is accepted.)

Although your bank should know that date from the sales contract, you should remind everyone you speak with about the deadline, especially if it's near and the process seems to be dragging out.

Once you have your contract, you'll need to give a copy to your real estate agent, who will pass it along to the seller.

You're ready for closing.

By Mike Sante

Interest.com Managing Editor

Have a question about your finances? Ask us at editors@interest.com.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.