Choosing the proper type of Mortgage to fit your needs is crucial at the beginning. These two are the main types of mortgage loans.
1) Fixed-Rate Mortgage Loan
Interest rate stays same over the life of
the loan. So the monthly mortgage payment does not change irrespective
of whether the mortgage rate goes up or down.
If the mortgage rates go down, you will be paying more or vice versa.
Generally Higher rate will be charged by the lender in fixed rate
mortgage loan.
2) Adjustable Rate Mortgage Loan
In Adjustable Rate Mortgage Loan interest rate varies periodically after
the initial period during which it will be fixed.
When the interest rates go up, you need to pay more and when the
interest rates go down you will be paying lower mortgage monthly
depending upon the mortgage rate periodically.
Both types of loans have their own pros and cons, Analyze carefully
before choosing the right type of mortgage loan which suits your needs.