NEW YORK (CNN/Money) - How do you suggest shopping for and comparing the best mortgage deals, and does it matter whether you borrow from a local lender?

-- Lou DiMaio, Lusby, Maryland

Compared with the bad old days when searching for a mortgage meant flipping through newspaper ads, making endless phone calls and even trudging from bank to bank, today is a virtual paradise for anyone looking for a home loan.

You can hop on the Net and within minutes get a quick update on recent trends in mortgage rates, find out what terms specific lenders are offering, have different lenders compete to make you a loan -- and then go to online calculators that can help you evaluate your different loan options.

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You can start your loan search right here using our Rate Search tool. Just select the type of mortgage you want, the state you live in and voila! You'll instantly get a list of lenders that want to make loans in your area, along with such information as the interest rates they offer, the number of points they charge (a point equals one percentage point of the loan amount) and the length of the lock-in period (essentially how long the lender will guarantee the quoted rate once you agree to do business together).

You'll probably want to broaden your search beyond the names you come up with at our site. One way to do that is to go to sites such as Bankrate.com, as well as MortgageExpo.com, E-loan and 100 BestLenders.com that match borrowers with lenders.

Typically, when you go to a site such as MortgageExpo, you provide information about your finances, the purchase price of the home, the down payment you plan to make and the type of loan you're considering. Then the site matches you with lenders willing to make you a loan. The idea here is that instead of you going to a variety of lenders to seek out their terms, the lenders bring their terms to you.

At this point, you should have details on loans from a variety of lenders. Be sure that you've got an accurate fix on all the fees involved with the loan -- points, application costs, lock-in fees, etc. This is important because to evaluate the best loan for your situation, you want to take into account not just the rate charged, but the costs as well.

Normally, this is where things get messy. Are you better off with a 7.5 percent loan that has no points and a $300 application fee, or a 7.25 percent loan that charges 1.5 points and a $200 application fee? To answer that question, you not only have to be able to understand the tradeoff between the rate and fees, you've got to consider such factors as your income tax rate (because points are usually deductible) and the length of time you plan to stay in the house.

Left to our own devices, such calculations would be beyond most of us. But there are some online calculators that can help, such as the True Cost Calculator at Fannie Mae's Homepath.com site. After you input all the relevant information, the calculator spits out both the before- and after-tax cost of the loan expressed as an annual percentage. By going through this process for several loans, you can see how they stack up by the True Cost standard.

As to the question of whether you should go with a local lender, I don't see much of a reason to do so. For one thing, the term "local lender" doesn't mean what it used to in that many large national firms have offices all over the country. So a national firm may not be local in the sense that it operates primarily out of your hometown. But it's local in the sense that it may have an office near you. Most lenders are going to have a representative of some type on hand anyway to handle such issues as signing documents that need to be signed.

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Besides, even if you do borrow from a local lender, you're probably not going to be dealing with that lender after you get the loan. Why? Because most lenders these days sell their home loans into the mortgage-backed securities market and other companies buy the rights to service them -- that is, collect payments, answer questions, etc. The notion of doing business with a friendly old loan officer who knows you and knew your family is already pretty much a thing of the past when it comes to home mortgages.

So you're ready to shop for your mortgage. Now all you need is the money to pay for the loan.

Walter Updegrave is the author of "Investing for the Financially Challenged" and can be seen regularly Monday mornings at 8:40 am on CNNfn.