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30-year Fixed

Choose the 30-year fixed if you plan on staying in your home for longer than 10 years. Interest rates are still at historical lows, locking into a good fixed-rate mortgage could mean security against rising rates.

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15-year Fixed

Choose the 15-year fixed if you plan on staying in your home for the long term. Quickly paying off your mortgage with a low fixed rate could save you a lot of money in the long run. But be prepared - your payments can be almost double from what you are paying with an ARM or 30-year fixed.

For example: With a $300,000 loan at a 6% interest rate, you will pay about $2,531 with a 15-year fixed as opposed to $1,798 with a 30-year fixed.

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ARMs (Adjustable rate mortgages)

Choose these loan programs if you plan to either sell or refinance before the end of the fixed rate period. Adjustable rate loans are riskier because the interest rate could increase after the initial fixed rate period. But because you are taking on the risk of possible interest rate increases, you benefit with a lower interest rate and monthly payment during the initial fixed interest period.

How it works: The interest rate on these types of loans are fixed for a set period of time and then become adjustable for the remainder of the loan period. Example - a 3-year fixed loan would have a fixed interest rate for the first 3 years and then convert to an adjustable rate for the remainder of the loan.

Interest-only ARMs

Choose an Interest-only loan to increase your home purchasing power or maximize your cash flow. You can put money away each month or use your savings to accomplish outer financial goals during the interest only period. You should be prepared to either refinance or sell before the interest-only period is up. If not, your payments will rise significantly. The minimum payment covers only the interest on your loan and you have the option each month to pay on the principal.