If you're in the market for a house and you have good credit, you're in the driver's seat right now.

The market is flooded with homes, sellers are eager and fixed-rate mortgages are going for interest rates your grandparents would have been tickled to get.

But that doesn't mean you should jump into just any mortgage.

Here are 5 steps to help you get the best possible loan.

Step 1. Shop around for a competitive rate.

Traditional 30-year, fixed-rate loans are so affordable, there's no reason to even consider an adjustable-rate mortgage. Just get out there and see who's offering the lowest interest rates.

Look online. Our extensive database of mortgage rates allows you to compare loans being offered by dozens of lenders in your area.

Ask around. Talk to friends and family members, even a real estate agent, to see if they've had such a great experience with a bank or mortgage company that they'd recommend it to you.

Consider credit unions. They often charge less than commercial banks. The trick is, you have to be a member of the credit union to get a loan, and membership is restricted to certain communities.

To find out if you're eligible to join a credit union, start by asking your employer. Also try family and friends or go to findacreditunion.com to locate ones you might be eligible to join.

If you have bad credit, it's very hard to get a mortgage. Your best -- and in many cases only -- option is to qualify for a federally backed loan program.

To learn more about that, go to our advice on how to get an FHA or VA loan.

Step 2. Pick the best deal and get preapproved.

For most borrowers, that's the loan with the lowest rate and fees of $1,000 or less.

Contact the lender and ask to be preapproved for the loan you want.

You'll need to fill out an application that tells how much you make, how much you've saved and how much you owe on everything from cars to school loans to credit cards.

The lender will assess that, check your credit report and scores and reply with a letter saying you've been preapproved and how much you can borrow.

That's your first chance to see how creditworthy a bank or mortgage company considers you to be, and to discover any unexpected problems that might make it difficult to qualify for a loan, borrow as much as you want and get a good rate.

(Don't settle for being prequalified. That means the lender took your word for everything and didn't pull your credit history or scores.)

Step 3. Apply for the loan.

Once you've found the home you want to buy, it's time to pull out the checkbook and apply for real.

Most lenders charge a nonrefundable application fee that can range from less than $250 to as much as $500.

Most borrowers stick with the bank or mortgage company that preapproved their loan.

But don't be surprised if you have to fill out a second application. (Here's a look at the questions you'll be asked and the information you'll need to complete the forms).

You'll also have to provide a copy of your purchase agreement and verify your income, savings and debts with bank statements, check stubs and many other documents. (Here's a checklist of the paperwork you'll need.)

Step 4. Lock in a rate.

Interest rates fluctuate, and most lenders won't guarantee what you'll pay until 30 to 45 days before closing. You never know what you'll really pay until then.

As that day approaches, you need to check around one last time to make sure your lender is still offering the best -- or close to the best -- deal.

More often than not, that will be the case. But if you're suddenly being quoted a significantly higher interest rate, or a rate that's no longer competitive with what other lenders are advertising, you need to ask why.

If your loan officer doesn't have a good answer, you need to reapply somewhere else.

Although switching lenders could force you to push the closing back a few weeks, you shouldn't hesitate to pursue the best possible mortgage.

With home sales unsteady and the market in recovery, no seller in their right mind is going to kill a deal over a delay like that.

Step 5. Get the commitment letter.

Your sales contract will set a deadline, usually a week to 10 days before closing, to obtain final approval for your loan.

Although your bank knows that date from the sales contract, you should remind everyone you speak with about the deadline, especially if the process seems to be dragging on.

If you miss the deadline, the seller can terminate the sale and try to keep your earnest money. (That's the cash you are usually required to give the seller's real estate agent when your offer is accepted.)

But, as we said, you can expect the seller to be patient in a market like this.

Once you have your contract, you're ready for closing.

By Mary Yanni

Interest.com Contributing Editor

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.