The most common mortgages last for 15 or 30 years. Several types of mortgages are available:
Fixed Rate Mortgages
Fixed rate mortgages carry the same interest rate during the life of the loan. Your basic mortgage payment is always the same. (If your lender collects monthly property tax and insurance payments for you, your fixed payment may vary from year to year.) Fifteen-year mortgages have much higher monthly payments.
Variable Rate Mortgages
Variable rate mortgages often allow you to qualify for a smaller payment and lower introductory rate, but this does not make them a good choice. Your monthly payment can increase if interest rates rise. Learn how high the interest rate can go, how often the interest rate may change and be sure you can afford a higher payment.
Federal Housing Administration (FHA) Loans
If you have damaged credit, FHA loans are easier to qualify for and usually have lower downpayment requirements. You may even be able to get a loan if you've been through bankruptcy. To find out more, visit the FHA website.
Consumer Action's Housing Information Project created this brochure in partnership with Capital One Services, Inc. © 2007 Consumer Action. Rights Reserved.