There are several different types of home mortgages available on the market these days and the smart buyer will know what mortgages they are looking for before they ever set foot inside a bank or finance company. There are in all about ten different types of mortgages but we are going to talk about four different types here. The first is the first time home buyer programs, the adjustable rate mortgage, the fixed rate mortgage as well as the balloon payment mortgage. Knowing these types of mortgages will help you to make the decision on which mortgage works best for your financial situation.

The first type that we’ll cover is probably the most common of the types of home mortgage and that is the fixed rate mortgage. This type of loan has the same interest rate throughout the entire term of the loan. That means that your payment will be exactly the same each month, except for the payment at the very end. Generally, you can get fixed rate mortgages at 10 or 15 years or 30 year loan terms. If you plan on living in your home for ten years or more and you need to know an exact amount of your house payment for budgeting reasons then this type of loan is perfect for you.

If you want to get the lowest interest rate possible then you may be interested in an adjustable rate mortgage instead. An adjustable rate mortgage or ARM, changes with the financial index. For instance, if you think that interest rates will be going down over the next few years then an ARM may be exactly what you want. A common type of adjustable rate mortgage is the one year ARM, which changes the interest rate yearly based upon the current financial market. There is a risk to the buyer with an adjustable rate mortgage that the interest may not change in your favor, and in fact may increase each year so that your monthly payment goes up. You’ll have to decide if this is a risk you want to take.

Another one of the home mortgage types is the balloon payment mortgages. These type of mortgages are intended for those who plan on a large sum or money, or a business that will be expanding. The payments are low for the majority of the term of the loan, and then a large lump sum of money is required at the end of the loan. This can be great for someone who has a business that has expansion plans in the future or for someone who is expecting a bonus or some other form of big money at the end of a certain period of time.

The last type of mortgage that we’ll discuss is the first time home buyer programs. These programs are intended to make things easier for someone who has never purchased a home before and often offer incentives to make it more appealing and easier to get than for someone who has gotten a mortgage before. First time home buyer programs will give you the benefit of an agents experience and can help you through things like closing costs, earnest money and the down payment, as well as how to get your credit ready for buying a home.