The best home mortgage loan is one you can afford for as long as you plan to
remain in the home. Affordability varies with the types of mortgage loans. The two most common types of
mortgage loans are fixed- and adjustable-rate mortgages (ARM).
A fixed-rate mortgage is constant for the length of the loan, usually 30 years. Shorter term
fixed-rates, typically 15- or 20-years, carry lower interest rates, higher payments and less money paid
out than with a longer-term loan mortgage loans. Longer term fixed-rates have smaller monthly payments
and are easier to budget than shorter term mortgage loans.
ARMs initially come with rates lower than a fixed rate mortgage but periodically rise or fall,
depending on economic factors. Its lower initial rate can help you qualify for a larger mortgage loan.
If you know your income will rise to keep pace with an ARM's periodic adjustment and you plan to move
in a few years, an ARM could be a good choice.
Use the following home loan tools to determine the mortgage that's best for you:
