There are many types of mortgages. It is up to you to educate yourself about all types of mortgages before you start looking for your next home. Most people apply for a fixed rate mortgage. With a fixed rate home mortgage program, your interest rate stays the same for the life of the loan, which can vary from 10 to 30 years.
The advantage of a fixed rate mortgage is that you always know and can plan the exact amount of your mortgage, although your property taxes and homeowners insurance may change over the term of your mortgage.
Another type of mortgage is an adjustable rate mortgage (ARM). With this type of mortgage, your interest rate and monthly payments usually start out lower than a fixed rate mortgage. But your plans and payouts can fluctuate up and down once or twice a year. This adjustment relates to financial indices such as the US Securities Index.
The benefit of ARM is that you may be able to buy a more expensive home because your initial interest rate is lower. There are several state mortgage programs, including the Veterans Administration Program, Department of Agriculture programs, Federal Housing Administration mortgages, and traditional loans.
Thoroughly discuss your financial situation with your real estate agent about the various loan options before you start buying a mortgage. The Federal Housing Administration (FHA), Veterans Administration (VA), United States Department of Agriculture (USDA), and conventional funding have different policies and requirements for early payments.