Choosing a home mortgage is probably the biggest financial decision most people make in their lifetime. When choosing a mortgage loan it is important to learn about the different mortgage types available so you are equipped to make the right choice.

Making the wrong choice can cost you tens of thousands of dollars more in mortgage interest payments or the possibility of losing your home as a lot of home buyers found out recently during the boom years.

There are several mortgage loans available these days, some are very risky when used improperly. Some home mortgages are just darn right risky and should never have been offered for home purchases or for mortgage refinancing.

Most people will need to finance a home purchase with a bank or mortgage company. There are several ways to go about finging home mortgage loans. One can go to a mortgage company or mortgage broker, shop for mortgage rates at banks or even comparision shop for mortgage types and rates online. We offer a mortgage search engine that allows you to search for mortgage rates in your zip code.

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When you start your search for mortgages be sure to figure out how much you can afford to pay each month. Another factor to consider when buying a home is the down payment. In the boom years anyone could get a loan with a small or no down payment. Those days are over, most banks will require you to have a minimum of a 20 percent down payment, though some banks and mortgage companies require less.

When refinancing a mortgage the loan-to-value ratio cannot exceed 80 percent, meaning your existing mortgage cannot exceed 80 percent of the value to the home. Example: If you home is worth $500,000 the existing mortgage loan cannot exceed $400,000.

With today’s mortgage rates so low lots of folks tried to refinance a mortgage but couldn’t since the value of their home dropped and the loan to value exceeded 80 percent. The government has recently offered a program for home owners who exceed the loan-to-value ratio but your mortgage must be held by one of the government sponsored entities like Freddie Mac to qualify for refinancing.

Choosing a home mortgage loan can be a complicated task. A good option is to become knowledgeable with the different types of mortgages available. Now is a good time to purchase a home refinancing a mortgage because current mortgage rates are at historic lows.

The most common mortgage product is a 30-year mortgage. There are conforming 30 year fixed rate mortgages and jumbo fixed rate mortgages. Jumbo mortgage rates are higher because banks are unable to sell those loans to Freddie Mac and Fannie Mae due to the mortgage loan limits that prevent them from purchasing loans over a certain dollar amount. The mortgage amount is set by the county you live in. You can search for conforming loan limits by county here. Conforming loan limits.

15-year mortgages are another common mortgage product. Your monthly payments will be highest than a 30-year mortgage because you are paying off the mortgage loan in 15 years. The interest rate savings over the life of the loan can be substantial. 40-year mortgages are also available but we don’t recommend this mortgage product because the interest you will pay over the life of the loan is ridiculous.

Adjustable rate mortgages allow one to enjoy lower mortgage rates during an initial period of the mortgage loan. Then the interest rate resets annually after the initial period has ended. There are different fixed rates available, including one year adjustable rate mortgages, 5 year adjustable rate mortgages known as 5/1 ARMs, 7 year adjustable rate mortgages, known as 7/1 ARMs and 10 year adjustable rate mortgages, known as 10/a ARMs.

Interest only mortgages allow you to only pay interest charges on the loan, you don’t make principal payments at all. Initially the monthly mortgage payments are lower since you’re not paying down the principal balance. There is a set period of time you only pay interest, after that period your payments include principal payments so your monthly mortgage payment increases.

Now that you have some information on the different type of mortgages available you can start searching for the best mortgage rates available right here by using our free mortgage search engine. You can search for mortgage providers, mortgage types and mortgage rates in your zip code right here.

Mortgage Search Engine