Finally—and perhaps most importantly—don’t get caught up in “house fever” and commit to buying more than you can afford. One way to do this is by being pre-approved by your mortgage company. This will tell you exactly how much you can afford to pay, and that will automatically slim down your options. A good rule of thumb when you’re shopping is that your mortgage payment shouldn’t exceed more than 36 percent of your income.

To view our recommended home mortgage lenders or to read more articles about bome buying, visit: Recommended Mortgage Lenders Online.

So, who might use an ARM? For starters, if you are purchasing a house for investment purposes and plan to sell it quickly, you might take advantage of low interest rates by getting this type of loan—particularly if it looks as if they may go lower. Another reason to use an ARM as a home loan is if you are buying a home in a time when interest rates are on decline. You can take out an ARM, and then change it to a fixed loan once interest rates bottom out.

Balloon Mortgage

With this type of loan, you will make monthly payments for a fixed amount of time, with a fixed interest rate. The difference is that at end of payment schedule, you will owe unpaid balance in one lump sum. If you use a balloon mortgage, you will find that interest rates are much lower than either a fixed rate mortgage or an ARM.

The obvious negative to this type of loan is that huge payment due at end, but if you are planning to hold house for a short period of time, then this might be loan for you.

By understanding various types of home loans that are available to you, you will be better prepared to make a decision that is just right for you and your family.

To view our recommended sources for home mortgage loans, visit: Recommended Home Mortgage Lenders Online.