Whenever you see how many loan products there are on the market, then trying to choose the right one for yourself is a bit daunting. You have the fixed rate, adjustable rate, jumbo, and variations on all of them.

The best way to resolve this problem would be to speak with a reputable lender and let them assist you in sorting out what all your options are. In this article we’ll try to give you a quick study of the various loan types out there:

Fixed Rate Mortgage – These loan types are the most popular. You can pay them back over periods of ten, fifteen, twenty, thirty, and sometimes forty years and have your interest rate and your payments stay fixed each month.

Balloon Mortgage – A balloon mortgage usually follows a pattern like a fixed rate mortgage, but the total balance becomes due within a shorter time period. This is usually from 5 to 7 years. Borrowers make payments like they do with a fixed rate loan, only they are required to pay their remaining balance after 5 years. Borrowers like these loans because of the lower interest rates.

Adjustable Rate Mortgage – These have a similarity to the fixed rate mortgage. They’re amortized over a specific number of years, only the interest rates may fluctuate. There is a period of time that is set where the interest rate remains fixed, and then it gets reset depending on what the market rates are then. They offer you lower rates at the beginning, but those rates can rise without notice.

Option ARMs – When you have an Option ARM your interest rates may fluctuate monthly without warning. Many borrowers are interested in Option ARMs due to their lower initial monthly requirements, can also see their payments go up greatly down the road.

VA Loan – These too are government guaranteed and reserved for those individuals who have a military history of active duty or for their surviving spouses. They’re often available with little to no downpayment and very attractive interest rates.

Interest-Only Mortgage – These loans enable borrowers to only pay the interest on their home loans for a specific period of time. They can sometimes be dangerous for a lot of consumers because every month you make no progress for paying down your mortgage debt. These loans need to be used with much caution and you need a good understanding of the way they work. They are attractive to borrowers due to their low monthly payment for a number of months.

FHA Loan – This type of loan is government guaranteed and is usually offered to first time home buyers who have moderate to low incomes. Because these loans are government guaranteed they are usually easier for people to qualify for. They also call for a lower down payment as well as carry lower interest rates.