Kinds of mortgage Loans

I know I want a 30-year fixed

A 30-year fixed-rate loan is a good choice for many people, but it’s not the only kind of loan available. Depending on your circumstances and goals, you might also see if a different kind of loan might suit you better. There are a lot of options to consider when it comes to a mortgage loan that will affect how much you pay on a month-to-month basis. The kind of loan you choose also affects the level of risk you take on.

A loan option is actually three distinct choices:

1. Loan term – The term of your loan is how long you have to repay the loan.
2. Interest rate type – Interest rates come in two basic types: fixed (stays the same over time) and adjustable.
3. Loan type – Mortgage loans are organized into categories based on the size of the loan and whether they are part of a government program.

You’ll want to check out our guide to understand loan options in “Owning a Home” to explore these three factors in detail. The option that is right for you will also depend on your down payment and the amount you can pay each month.

“Owning a Home” has a helpful tool that can help you explore interest rates for different loan options. Here you can play around to see what different mortgage options might mean for you in terms of the interest rate you can expect. The interest rate you receive is a big factor in determining the size of your mortgage payments.