You already know that 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

Once you have mad a decision on a Mortgage Broker, you should sit down with Him/Her and look at the options that make the most sense for your particular scenario. There are two basic types: fixed-rate and adjustable-rate mortgages, known as ARMs.

With a fixed-rate loan, the basic monthly payment -- interest and principal, not counting taxes, insurance or any assessments -- stays the same for as long as you have the loan.

With an ARM, the interest rate can change. When and how it changes will depend upon the type and length of the ARM you have. There are one-year ARMs, where the interest rate stays the same for the first year, and then changes based on where the index rate is on the date it changes. There 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 a 30-year loan.

In general terms, one of the main factors you should think about 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, since you'll be buying a new home at whatever the interest rate will be at that point, no matter what interest rate you pay now. If you plan on being there for the long haul, a fixed-rate loan is your best bet.

Click here for a more detailed look at the different types of mortgages to help choose the best one for you.

There are a couple of mortgages that deserve special attention because they can be very dangerous ... which, in mortgage terms, means expensive. You should stay away from:

Option Arms: Buying a loan with four different payment options seems like a great idea. But if you make the "minimum payment" every month -- which many borrowers do -- you'll actually be adding to your debt, not paying it down.

And think hard, before taking out a:

Forty or Fifty Year Mortgage: By spreading the loan over four or five decades you'll pay tens of thousands of dollars in additional interest, build equity very slowly, and lower your monthly payments surprisingly little.

Interest Only: These also appear "cheaper" because all you are paying is the interest. The interest, in many cases, however, can fluctuate from month-to-month. And regardless of what it does, you are not reducing the principal unless you have the discipline and income to make extra payments.

Jumbo Loans: Before borrowing $417,000 or more you should ask yourself if you can really afford to pay $3,000 or more, month after month, for a house. If you become ill or lose your job, do you have enough money saved to keep up with the payments? Did we mention that you'll pay a higher interest rate for a jumbo loan, too?

Finally, decide if you are eligible for a lower interest rate by qualifying for a program in which the government guarantees to repay the loan if you default on your payments. To find out if the two most popular programs can help you, go to:

FHA Loans