Types

• There are two categories of mortgages: fixed rate and adjustable rate. Fixed-rate mortgages (FRMs) have the same interest rate for the term of the loan, while adjustable-rate mortgages (ARMs) have a fixed rate for the introductory period, usually one to five years, and then adjust after that, usually annually.
  
  

Size

• The amount of money you can borrow for a conventional mortgage is limited by the conforming loan limits set each year by Fannie Mae and Freddie Mac. If you need a larger loan, you may be able to get a jumbo mortgage, but you will have to pay a higher interest rate.
  
  

Considerations

• The lender will take into account your credit history, income and the amount of your down payment when considering whether to grant you a loan and what interest rate to charge.
  
  

Time Frame

• Most mortgages have a term of 15 or 30 years, but most borrowers will pay off the loan early or refinance before the end of the loan.
  
  

Warning

• Consider the costs of home insurance, real estate taxes and home improvements when you buy a home in addition to the monthly mortgage payment, so you do not get a mortgage that is too expensive for you.