Many entities, including banks, credit unions, savings and loans, insurance companies, and mortgage bankers, make home loans. Lenders and terms change frequently as new companies appear, old ones merge, and market conditions fluctuate. To get the best deal, it's a good idea to compare loans and fees with at least a half a dozen lenders -- or to get the help of an experienced mortgage broker, who can help you sift through the latest offerings.

Because many types of home loans are standardized to comply with government rules, comparison shopping isn't difficult. (The Federal National Mortgage Association or "Fannie Mae," as well as other quasi-governmental corporations set these rules as a condition for buying loans off the lenders.)

However, you'll need to decide what type of mortgage you're interested in first, whether it's a fixed rate, adjustable rate, or some sort of hybrids. Once you've narrowed your sights to a particular size, type, and length of mortgage -- such as a 30-year fixed term mortgage for $300,000 -- you'll be ready to compare apples to apples.

Mortgage rates and fees are usually published in the real estate sections of metropolitan newspapers and on mortgage websites. (See Nolo's article Shopping for a Mortgage Online.) It's wise to do some advance research even if you decide to work with a loan broker, so that you'll have a sense of the market. Some loan brokers charge the consumer directly, others collect a fee from the lender (though this ultimately adds a little to what you pay for your mortgage).

Be sure to check out government-subsidized mortgages, which offer both no-down-payment and low-down-payment plans. (See the question What kinds of government loans are available to homebuyers?, below.) Also, ask banks and other private lenders about any "first-time buyer" programs that offer low-down-payment plans and flexible qualifying guidelines to low- and moderate-income buyers with good credit.

Finally, don't forget private sources of mortgage money -- parents, other relatives, friends, or even the seller of the house you want to buy. Borrowing money privately is usually the most cost-efficient mortgage of all. And its popularity is increasing as credit tightens.

For information on how much money you can expect from a mortgage, see Nolo's article Qualifying for a Mortgage.

Although loans were available to people putting less than 20% down during the real estate boom of the late 1990's and early 2000s, lenders have since become much more cautious. Even if you can afford high monthly mortgage payments and have a high credit score, you may have trouble finding a low (5% to 15%) or even no down payment loan -- and the one you find will likely require you to pay a higher interest rate and loan fees (points) than if you'd made a larger down payment.

Also, if you put down less than 20%, you may have to either pay for private mortgage insurance (PMI) or, to avoid PMI, take out two separate loans (a first mortgage and a second mortgage).

Private mortgage insurance or "PMI" policies are designed to reimburse a mortgage lender up to a certain amount if you default on your loan and your house isn't worth enough to entirely repay the lender through a foreclosure sale. Most lenders require PMI on loans where the borrower makes a down payment of less than 20%.

Premiums are usually paid monthly and typically cost around one-half of one percent of the mortgage loan. You can normally cancel the PMI once your equity in the house reaches 20-25%, so long as you've made timely mortgage payments. For more information, see Nolo's article How Do I Get Rid of My PMI (Private Mortgage Insurance)?

Let's start with the IRAs. Under the 1997 Taxpayer Relief Act, certain homeowners can withdraw up to $10,000 penalty free from an individual retirement account (IRA) for a down payment to purchase a principal residence (though you might have to pay income tax on the amount withdrawn). If you've got a Roth IRA, however, you must have had the account for five years to make tax-free withdrawals.

This $10,000 is a lifetime limit -- and the money must be used within 120 days of the date you receive it. The law limits use of this benefit to so-called "first-time homeowners" -- but generously defines these as people who haven't owned a house for the past two years. If a couple is buying a home, both must be first-time homeowners. Ask your tax accountant for more information, or check IRS rules at www.irs.gov. Also see Nolo's article Getting Your Retirement Money Early -- Without Penalty.

If you have a 401(k), you have two options. One is to do a so-called hardship withdrawal -- but, because this would subject you to taxes and a 10% penalty, we recommend you avoid this.

You can also take an ordinary loan from your 401(k) plan without penalty, as long as you meet certain conditions and you promise to pay it back. Borrowing against your 401(k) offers several advantages:

• You, not a bank, receive the interest payments.
• The loan fees are usually less than what a bank would charge.
• The paperwork is less than would be required for a typical bank loan.

Keep in mind, however, that you'll need to repay the loan with after-tax dollars, and you'll forego the earnings on the 401(k) money you withdraw -- until it is paid back.

Ask your employer or plan administrator whether your plan allows loans. If it does, the maximum loan amount under the law is one-half of your vested balance in the plan, or $50,000, whichever is less. (If, however, you have less than $20,000 in your plan, your limit is the amount of your vested balance, but no more than $10,000.) Other conditions, including the maximum term, the minimum loan amount, the interest rate, and the applicable loan fees, are set by your employer. Any loan must be repaid in a "reasonable amount of time," although the Tax Code doesn't define what is reasonable.

Be sure to find out what happens if you leave your job before fully repaying a loan from your 401(k) plan. If a loan becomes due immediately on your departure, income tax penalties may apply to the outstanding balance -- but you may be able to avoid this hassle by repaying the loan before you leave the job.

For information on other sources of down payments, see Nolo's article Finding a Down Payment to Buy a House.

Several federal, state, and local government financing programs are available to homebuyers. The two main federal programs are:

VA loans. U.S. Department of Veterans Affairs (VA) loans are available to men and women who are now in the military and to veterans with honorable discharges who meet specific eligibility rules, most of which relate to length of service. The VA doesn't make mortgage loans, but guarantees part of the house loan you get from a bank, savings and loan, or other private lender. If you default, the VA pays the lender the amount guaranteed and you in turn will owe the VA. This guarantee makes it easier for veterans to get favorable loan terms with a low down payment. For more information, check the VA's Website at www.va.gov or contact a regional VA office for advice.

FHA loans. The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), insures loans made to all U.S. citizens, permanent residents, and noncitizens with work permits who meet financial qualification rules. Under its most popular program, if the buyer defaults and the lender forecloses, the FHA pays 100% of the amount insured. This loan insurance lets qualified people buy affordable houses. The major attraction of an FHA-insured loan is that it requires a low down payment, usually about 3% to 5%. For more information on FHA loan programs, contact a regional office of HUD or check the FHA website at www.hud.gov.

For information on other government loans, contact your state and local housing offices. They often have programs available for first-time homebuyers who are purchasing modestly priced properties. To find your state housing office, check the State and Local Government on the Net Directory at http://statelocalgov.net. Or, go to your state's home page, where you may find the listing for your state's housing office.

With a fixed rate mortgage, the interest rate and the amount you pay each month remain the same over the entire mortgage term, traditionally 15 or 30 years. Some variations are available, such as five- and seven-year fixed rate loans with balloon payments at the end.

With an adjustable rate mortgage (ARM), the interest rate fluctuates according to the interest rates in the economy. Initial interest rates of ARMs are typically offered at a discounted ("teaser") rate that's lower than the rate for fixed rate mortgages. Over time, when initial discounts are filtered out, ARM rates will fluctuate as general interest rates go up and down. Different ARMs are tied to different financial indexes, some of which fluctuate up or down more quickly than others. To avoid constant and drastic changes, ARMs typically regulate (cap) how much and how often the interest rate and/or payments can change in a year and over the life of the loan.

You may find variations, including hybrids that change from a fixed to an adjustable rate after a period of years, or "option ARMs" that allow you to choose, on a monthly basis, whether to pay a minimum amount, an interest-only amount, an ordinary principal plus interest amount, or an accelerated payment amount. However, these have become less available since the tightening of credit that followed the great real-estate bubble burst of 2008.

It depends. Because interest rates and mortgage options change often, your choice of a fixed or adjustable rate mortgage should depend on:

• the interest rates and mortgage options available when you're buying a house
• your view of the future (generally, high inflation will mean ARM rates will go up and lower inflation means that they will fall)
• your personal financial and investment goals, and
• how willing you are to take a risk.

When mortgage rates are low, a fixed rate mortgage is the best bet for many buyers. Over the next five, ten, or thirty years, interest rates are more apt to go up than further down. Even if rates could go a little lower in the short run, an ARM's teaser rate will adjust up soon and you won't gain much if you plan to stay in the house more than a few years (the broker can tell you your break-even point). In the long run, ARMs are likely to go up, meaning many buyers will be best off locking in a favorable fixed rate now and not taking the risk of much higher rates later.

Keep in mind that lenders not only lend money to purchase homes; they also lend money to refinance homes. For example, if you take out a fixed rate loan now, and several years from now interest rates have dropped, refinancing will probably be an option.

For calculators that will help you make refinancing decisions, see the list of online mortgage websites in Shopping for a Mortgage Online.

There are several downsides to refinancing. Unless you can negotiate a low-cost refi, you may have to pay the same fees and points as for an original mortgage. This means you may reduce your monthly payment right away but you may not actually begin to save money on the refi for several years -- and you'll probably extend the number of years that you'll owe money for, assuming you start over with another 30-year mortgage. (Again, your broker can help you when run the numbers.) So, if you think you'll be moving again soon, it may not make sense to refinance.

Second, if you default on a refinanced mortgage, your position under your state's law can get worse. In California, for instance, when a homebuyer defaults (stops paying the mortgage) on a purchase mortgage, the lender can foreclose on the house but take nothing else from the homebuyer, while on a refinanced mortgage it can go after the homebuyer's cash and other assets, after the house, to satisfy the debt.