Choose your rate

Before you begin shopping for a home mortgage rate, it is important to understand the basic kinds of loans that are available. The type you choose will ultimately determine how much money you ultimately pay for your loan.

This page has been designed to give you basic information about the two most common types of home mortgages: fixed-rate (FRM) and adjustable-rate (ARM). While there are other types, these two are the most popular. Choosing between these two types of mortgages can be a difficult decision, as each has numerous affiliated pros and cons.

Of the two types, fixed-rate mortgages are more popular with the general public. Their most important quality is predictability; from the outset, borrowers know exactly what to expect. The luxury of predictability is not associated with adjustable-rate loans. That’s because the interest rate oscillate with the market. Borrowers with ARMs might see an increase in their home mortgage rate; alternatively, they might experience a decrease.

Both loans are available in different permutations. To understand what’s best, you will need to have a long conversation with your lender. Generally speaking, though, you should know that you will probably get the best home mortgage rate if you are able to put forward a substantial down payment from the outset.

Otherwise, you might check to see whether you are eligible for a special program that is sponsored by the federal government. There are several; the FHA and VA are most prominent.

In some instances, the type of loan that you can get will depend on the price of your house. For that reason, it is wise to figure out what your price range is before you begin shopping.