You've just signed the contract on your new home. You and your Realtor have looked long and hard for the perfect home and have negotiated a fair price. Your next step? Choosing your mortgage loan. Believe it or not, your decision on the type of financing and specific lender may have a larger impact on your long-term financial condition than the price you've negotiated for your new home.

Whether you work with a mortgage broker, mortgage company, or bank, follow these general guidelines to find the right mortgage, at the right price, with the right service.

 The Groundwork

To begin, you'll need some basic information in hand. With it, you can ask lenders for accurate cost estimates. These estimates can change between now and closing, but the early figures will be useful for comparison. Here's what the lender needs to know:

    * Sales price, loan amount, and target closing date The lender's charges will vary depending on the loan amount, down payment percentage, and lock period (the period an interest rate is held for you). The longer you want to "lock" an interest rate, the higher the rate.
    * Townhouse, condo, high-rise condo, or single family detached Lenders require different down payments and may charge different rates for the various property types.
    * Is your employer helping with the transaction? If your company is paying points or relocation costs, you may get better-than-market rates. It also may be easier for you to receive loan approval.
    * Is the seller helping by paying points or closing costs? This can affect the rate and points charged. Points and costs paid must fall within government-set limits.
    * How long do you intend to own this home? Knowing this will help you select the right type of mortgage. The shorter the time you intend to own the home, the greater the chance that an adjustable rate mortgage may prove beneficial.
    * Are you a first-time home buyer? You may receive beneficial underwriting, rates, and terms if you meet government guidelines. These programs usually require that your new home meet certain location criteria and that your income fall within specified limits.

When you talk with the loan officer, mention any other concerns: Will a previous credit problem prevent me from receiving loan approval? Can I accept gift funds for the down payment? The lender also may ask you additional questions about what you're looking for in a mortgage loan.

 The Search

Begin your mortgage search by talking with a loan officer. Ask your Realtor or friends or neighbors for recommendations. Or, shop at one of the on-line lender sites. Lending-tree.com, loanapp.com, and of course, here. Once the loan officer has the information listed above, he or she can give you rate and point quotes for the loan(s) you're considering.

Ask for a Good Faith Estimate, which puts each estimate in writing: closing costs charged by the lender and title company, monthly payment, taxes, homeowners insurance, mortgage insurance (if any), and interim interest. Take some time to study it; be sure it covers all items. If you're unsure, ask your Realtor or the person who supplied the estimates. The completeness of the Good Faith Estimate and the loan officer's responsiveness to your questions are good indicators of the service you'll receive before, during, and after closing.

 Comparing Lenders

As you shop, keep in mind that the service you receive and, possibly, the rate you are quoted may depend on the loan officer's incentives. Most loan officers are paid, in part or in full, by commission. Their income is usually determined by the dollar volume of the loans they close and the amount of money the lender makes on each loan: That is, more loans, plus more money per loan equals more take-home pay.

The loan officer also wants to receive more referrals. In fact, the person who referred you may have some power in ensuring a smooth transaction.

If one or both of these incentives--money and referrals--are missing, you may not receive the responsiveness you expect. Ask each loan officer how he or she is paid and consider your choice accordingly.

 Rate, points, and lock period

Be sure you understand all three items: rate, points, and lock period.

Rates change daily--and vary, depending on the type and size of the loan.

To lock a rate means to hold the rate constant, with no ups or downs, for a set period. Rates can be locked for as little as 10 days or as long as 210 days--and even longer. But the longer the lock, the higher the rate. Be sure, too, that you ask for the lock that matches your estimated closing date. It does you no good to ask for a 30-day quote when you will not close for 45 days.

A point is 1 percent of the loan amount, paid at closing. Typically, home buyers pay a 1 percent "loan origination fee" (one point) and no "discount" points (points paid to reduce the interest rate). To help confuse you, this is called the "no point" loan quote! If you are willing to pay more points, you can reduce the interest rate on your loan. Be sure that the points you plan to pay match those on the Good Faith Estimate.

 Watch out for . . .

"Today's rate" This is useful only if you are closing today. If you intend to wait until after application to lock a rate, keep that information to yourself. Otherwise, you may be quoted unrealistically low rates to get your business.

Slow response time If you don't receive good service when a company is trying to get your loan, how good will the service be once they have it?

Rate predictions Sorry, loan officers do not have direct access to Federal Reserve Chairman Bernake. If a mortgage company has a great rate, but advises you to float the rate (not lock) because they say rates are coming down, beware!

 Finish the job

Once you select your mortgage, complete the application, sign the necessary disclosures and collect your backup items. You can meet with your lender or proceed with the application through email, on-line forms, fax, mail or delivery.

Although good loan officers will ask for all required documentation at or before your actual application, the underwriter who actually approves your loan may have other questions. The underwriter doesn't do his or her work until all the information is complete: the credit report, appraisal, and verifications of all the financial information you submitted at application. Once the underwriter's questions are answered, you can receive final loan approval and close the loan.

Then, once you have your dream house and your dream mortgage, all you need to worry about . . . is moving day.

 Tip list:

    * Do your mortgage homework.
    * Know the loan officer's incentives.
    * Get a Good Faith Estimate and review it carefully.
    * Compare rates on the same day with the same assumptions.
    * Ask the loan officer for a list of the last one to five closed loans that he or she originated. Ask these references about the service they received after closing.