Mortgage rates are so low, you're probably thinking about buying your first home or refinancing your mortgage if you already have one.

Getting a mortgage is harder than it used to be. But finding the best possible loan, with the lowest possible interest rate, fees and closing costs, can save you thousands of dollars.

Planning ahead, plus a little knowledge about the application process, are all you need.

Here are 8 smart moves you can make to seal a great mortgage deal in today's market:

Smart move 1. Check and fix your credit.

Nothing is more demoralizing than finding the perfect home and then having your mortgage application denied by lender after lender.

A bad credit score can raise the rate you pay by one-half to one or more percentage points and cost you plenty in higher fees at closing. That is, if a lender is willing to loan you money at all.

New credit score rules, introduced in early 2009, have reduced the impact of a single late payment. But additional late payments, or an account overdue by 90 days or more, will hurt your score much more than in the past.

And a single late mortgage payment can prevent you from getting a new mortgage for up to 12 months.

Credit reports can contain mistakes or negative information resulting from identity theft.

So, check your credit report for accuracy and get any mistakes taken care of before you apply for a loan.

To get a free credit report from each of the three major credit-reporting bureaus, go to annualcreditreport.com. Each report shows how to correct mistakes or submit an explanation for legitimate black marks that appear on the report.

To obtain the best rate, you need a score higher than 740. However, if your credit score is less than 700, work on improving it before you go mortgage shopping.

Smart move 2. Borrow only as much as you can afford.

Granted, lenders aren't throwing money around like they were five years ago.

But it's still easy to underestimate the cost of owning a home. And you can't count on house values increasing enough in a few years to deliver a profit if you sell.

In addition to your mortgage payment, you'll pay property taxes, homeowners insurance premiums, utilities, maintenance costs and possibly condo or association fees.

Our calculator can help you sort through all the costs and decide how much home you can afford. Then set your price range and stick to it.

Smart move 3. Get preapproved for a mortgage.

You can complete a lot of the mortgage process ahead of time by getting preapproved by a lender. (Here's our step-by-step advice on how to get preapproved.)

You'll find out how much you're qualified to borrow based on your income, debt ratios, credit score and other financial status.

Sellers might accept your offer more readily when they know that you are approved to borrow the amount you need for the purchase.

Smart move 4. Choose the right kind of mortgage.

After years of adjustable-rate, interest-only, negative-amortization, pay-what-you-want loans, the fixed-rate mortgage is the easy winner in today's market.

A 30-year, fixed-rate loan doesn't cost much more than an ARM, and your payment won't change as long as you have the loan. Right now, there's no reason to consider anything else.

Smart move 5. If you don't qualify for a regular mortgage, apply for an FHA loan.

Getting the Federal Housing Administration to guarantee your loan can help any buyer who has little cash for a down payment, a low credit score or too much debt.

The only catch is that the interest rate is slightly higher than non-FHA loans.

FHA loans can also help current homeowners struggling to keep up with their payments refinance into more affordable mortgages. Rules have been changed to make refinancing easier, and the amount of money you can borrow with an FHA loan has been significantly increased.

Here's where to learn more about FHA loans and what they can do for you.

(You'll get an even better deal if you can qualify for a VA loan.)

Smart move 6. Get three to five quotes.

Shop around. You'll be shocked at the differences among interest rates and fees.

The best possible deal can reduce your payments by hundreds of dollars a month while saving you hundreds or even thousands of dollars on up-front fees.

Rates often change several times a day. After you narrow down your list of lenders, call each one back within a few hours of one another to get your final quote.

Our extensive database of mortgage rates can give you a good sense of what loans cost now.

Our step-by-step advice on how to find the best home loan will walk you through the entire process.

Smart move 7. Negotiate your mortgage fees.

Mortgages come with a bewildering and expensive array of expenses: origination fees, administrative fees, title insurance, settlement charges and so on. You can save big by negotiating with your lender or asking the seller to pay some of them for you.

Smart move 8. Decide whether it pays to buy down your interest rate.

Paying discount points on your mortgage is like prepaying part of the interest on your loan. You pay money up front in exchange for a lower interest rate for the life of the loan.

In the past, paying one point on a loan knocked about one-quarter of a percentage point off your rate. Today, it might get one-half point or even more.

Buying down your interest rate makes sense if you have extra cash available and you're likely to stay in your home long enough to recoup the up-front cost.

As an example, say you want to borrow $300,000. Pay $3,000 up front, and your interest rate may drop from 5% to 4.5%, for a savings of about $90 a month. You'll make up your initial cost in 33 months.

If the rate falls to only 4.75%, it will save you about $45 per month, for a break-even point about five and a half years out.

Our mortgage points calculator allows you to decide whether you're better off paying points to lower your interest rate or adding that money to your down payment.

By Bonnie Biafore

Interest.com Contributing Editor