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Decide what type of loan is right for youBefore you even start looking for a mortgage lender, you have to know what type of bank loan you are looking for. There are two basic types of mortgage loans: fixed-rate and adjustable rate mortgages (also known as ARM) With a fixed-rate mortgage loan, the basic monthly payment or monthly mortgage payment - interest and principal, not counting taxes, insurance or any assessments -- stays the same for as long as you have the mortgage loan.

With an adjustable rate mortgage (ARM), the interest rate can change. When and how it changes will depend upon the type and length of the ARM you have. There is one-year adjustable rate mortgage, where the interest rate stays the same for the first year, and then changes based on where the index rate is on the date it changes. There is three-year ARM s, five-year ARM s and so on. The charm of an ARM is that the initial interest rate is usually lower than a 30-year mortgage loan.

In general terms, one of the main factors you should think about when looking at a right mortgage loan is how long you can reasonably expect to stay in a house. If you know you will be transferred in two years, then a two-or three-year ARM makes sense, since you'll be buying a new home at whatever the interest rate will be at that point, no matter what interest rate you pay now. If you plan on being there for the long haul, a fixed-rate mortgage loan is your best bet.
There are a couple of mortgages that deserve special attention because they can be very dangerous... which, in mortgage terms, means expensive. You should learn more, and think hard, before taking out mortgage loan: