It's important to shop around to find the mortgage and mortgage rate that's right for you. Contact lenders at banks and credit unions work well as mortgage brokers to find the best rate for you.

You'll have to choose between a fixed-rate, adjustable-rate or balloon/reset mortgage. You'll also have to choose your loan terms. Keep in mind that the lowest mortgage rate or longest loan term may not always be the best choice for you. You should also consider the overall cost of the loan, including fees (application, escrow, and appraisal fees, for example) and points.

Mortgage rates change frequently. With many lenders, you can "lock in" the rate, which allows you to complete the mortgage process knowing the exact interest rate you'll get for the life of the loan if the loan is a fixed rate or for the initial period if the loan is an ARM or a balloon/reset mortgage. If you believe rates will increase while your mortgage is being processed, you might lock in the current interest rate through your closing date. A typical lock-in lasts 30-60 days.