Your mortgage is probably the biggest loan you'll ever take out. These four tips will help you find the lender that's right for you.

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Buying a home is a major milestone. While homeowners typically have a higher net worth than renters, purchasing a home can be a financial disaster if you don't get the right type of mortgage. To make sure you find the best loan for your situation, follow these four tips.

1. Decide what kind of mortgage is right for you

Not all mortgages are created equal. Some mortgages are insured by the government, others meet requirements to be sold to government-sponsored entities, and others don't fall into either of these two categories.

There are differences in qualifying requirements and loan terms for different kinds of mortgages, so it's important to understand them. For example:

• FHA loans, VA loans, and USDA loans are all insured by the government. Lenders are protected if borrowers don't pay, so there are low down payment requirements, the loans are usually easier to qualify for, and interest is reasonable.

• Conforming loans fit within guidelines set by Fannie Mae and Freddie Mac, which are government-sponsored entities that buy loans on the secondary mortgage market. Lenders who offer conforming loans need to follow rules when it comes to down payment requirements, qualifying criteria, and maximum loan limits.

• Non-conforming loans don't meet Fannie and Freddie guidelines so they can't be sold as easily. Loans above $453,100 as of 2018 -- or above $679,650 in Alaska, Guam, and the Virgin Islands -- are considered non-conforming.

While most major lenders offer both conforming and non-conforming loans, you may have a more limited choice of lenders if you want a loan insured by Uncle Sam.

2. Research national average mortgage rates

You should have a good idea of both what type of loan you're looking for and what mortgage rates are reasonable before you start shopping around.

There are many different resources online where you can find national average rates. The Federal Housing Financing Agency also shows interest rates over the course of the past several months so you can compare current rates to historical trends.

By getting a good idea of what rates are reasonable, you can immediately disqualify lenders looking to charge you above market rates.

Remember, though, that if your credit score is low, you may not qualify for favorable -- or even average -- interest rates. Try to improve your credit score as much as possible before applying for a mortgage by paying down old debt and checking your credit report to have mistakes corrected.

3. Compare loans from different lenders

When you're sure your credit report doesn't have major errors and you have a good idea what interest rates are reasonable, it's time to start comparing loan options. You can use online tools to find mortgage lenders and compare offers for financing your home purchase.

It's important you're comparing apples-to-apples when evaluating offers from different lenders. You should look at:

• Interest costs: Some lenders state their interest rates in terms of APR, which is annual interest paid without taking compounding into account. Others state their rates in terms of APY, which states the actual interest paid over time after accounting for how frequently interest is added to the principal. APY is usually higher than APR.

• Points: You can pay points to reduce the interest rate on your mortgage. Each discount point costs 1% of the amount you're borrowing and generally reduces your rate by a set amount that varies by lender. For example, one point might lower your rate by a quarter of a percentage point. If two lenders offer the same interest rate but one requires you to pay points, your interest rate with the second lender is actually higher. You're just pre-paying the interest by paying points to buy the rate down.

• Loan fees and origination costs: A number of fees can be tacked onto a mortgage, including origination fees as well as charges for appraisals, credit checks, and more. If one mortgage costs much more up front than another with similar terms, it may not be a good deal.

• Loan term: Most borrowers either take out a 15-year mortgage or a 30-year mortgage. A 15-year loan will have higher monthly payments but a lower interest charge.

• Fixed or variable rate: Neither your interest rate nor your monthly payments change during the entire time you have the mortgage when you take out a fixed rate loan. When you get a variable rate mortgage, your interest rate may start out lower, but your rate and monthly payment could go up over time.

You want the loan that's going to provide the best overall deal for you. If you're staying in your home for a long time and want minimal risk, often this means the lowest cost fixed-rate loan from a reliable lender.

4. Research the lender's reputation

It's important to make sure you have a lender that treats customers fairly. Some of the key things you want to focus on include:

• How difficult it is to qualify for a mortgage

• How long it takes to get to closing

• Whether the lender has a good reputation for customer service

There's a very good chance your mortgage loan will get sold to a different loan servicer after closing. So, while it's important to consider the big picture, you may want to focus on the lender's reputation for getting deals done fairly from the start. That way, you'll be treated right as you go through the process of getting your mortgage -- even if your loan ultimately ends up in the hands of a different lender.

Getting the right mortgage is essential

You'll be paying off your mortgage for decades, and will pay thousands of dollars in interest to your mortgage lender. Take the time to find the loan that's best for you so you can enjoy your home without worrying about how to pay the mortgage bills.

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