There are a number of different types of home loans available to you, and it can pay to familiarize yourself with them. Luckily we're here to help you choose the best type of home loan for your needs.
Get StartedThe interest rate and principal-and-interest payment stay the same for the full term. This makes budgeting simple and protects you from future rate increases. A fixed loan can be a good fit if you plan to stay in the home for many years.
An ARM starts with a fixed rate for an initial period, then adjusts on a set schedule. Your rate equals index plus margin, subject to caps that limit how much the rate can change at each adjustment and over the life of the loan.
During the initial interest-only period you pay interest, not principal. This keeps the payment lower at first, but your balance does not fall, and the payment jumps when principal payments begin.
Payments start lower and increase on a set schedule for several years, which can help qualifying for some buyers.