Take a look at the Current Mortgage Rates

		Fixed Rate Mortgages Even today, the most popular mortgage loan type is the standard fixed rate mortgage. It provides borrowers with the security of fixed payments, and provides them the flexibility of selecting different loan terms, i.e., 30 yr. 25 yr. 20 yr. 15 yr. 30 Yr. Fixed Mortgage - The borrower pays down all the principal in 360 monthly payments. During the first 10 years more than 84% of the monthly payment is applied to interest and is tax deductible. 50% of the principal balance is finally paid off in the 22nd year of the loan. This loan type is by far the most popular and if you are looking for an affordable monthly payment rather than the rapid reduction of principal, this program would appeal to you. 15 Yr. Fixed Mortgage - The borrower pays down all the principal in 180 monthly payments. The interest rate on a 15 year mortgage is about 10% lower than that of a 30 year loan, and the payments are about 25% to 30% higher. About 50% of the balance is paid off in the first nine years. If your main concern is rapid equity building up, this product will appeal to you. 7/23 and 5/25 Fixed-rate Balloon Mortgages - Payments on these loans are amortized over 30 years, however, these loans are usually available at lower interest rates, since the rate is only guaranteed for 5 or 7 years, at which time the loan "balloons". Borrowers then have an option to extend the rate and whatever the current fixed rate is at the time the loan balloons. Most borrowers who take advantage of the attractive interest rates offered by balloon mortgages anticipate selling or refinancing their homes prior to the end of the balloon period. Adjustable Rate Mortgages These loans have fluctuating interest rates and payments. Borrowers usually obtain a substantially lower interest rate, at least initially, since they are actually sharing in the interest rate risk along with the lender. Factors to consider when considering and ARM are as follows: Adjustment period - Every ARM has the potential for rate and payment changes. The adjustment period varies according to the type of ARM. Some adjust every 6 months, others every year, 3 years, 5 or 7 years, or even 10 years. Caps - These are limits placed on payments or interest rate adjustments. The most commmon caps are 2% maximum rate increase per adjustment and 5% or 6% total adjustment over the life of the loan. Index - This is a measurement used by lenders to determine changes to the interest rate charged on ARMs. Indexes are based on a published, independent measure of current interest rates, such as T Bills, 11th District Cost of Funds and LIBOR. The index provides a guideline that should accurately reflect the current cost of lending money. Margin - Is added to the index to compute the interest rate at each adjustment period. It is set by the lender and is usually between 2-3%. Negative Amortization - Some adjustable rate mortgages have the potential for negative amortization. It occurs when the combination of interest rate adjustments and payments caps result in monthly payments that do not cover the monthly interest due. The unpaid interest is therefore added to the unpaid principal balance and results in increased indebtedness on the part of the borrower. You need to ask if the ARM you are interested in has the potential for negative am, and if so, make sure you understand the terms.

		Types of Adjustable Rate Mortgages 6 Month ARM - Has the potential for interest rate/payment adjustments every 6 months. Each adjustment is typically limited to a 1% with a lifetime cap of 6%. One-Year ARM - Adjusts annually, typically with 2% cap per year and a lifetime cap of 6%. If you are willing to accept the uncertainty of future interest rate fluctuations, this loan would appeal to you. 3/1, 5/1, 7/1, and 10/1 ARMs - These ARM's have initial adjustment periods of three, five, seven or 10 years, after which they convert to a one-yar ARM with annual adjustments. At the end of the fixed period of 3, 5, 7 or 10 year, the adjustment period varies, but is typically limited to a 2% increase with a lifetime cap of 4 to 6%. FHA Loans -  With and FHA-insured loan, even if you have only minimal resources you can afford the down payment and closing costs that often stand in the way of a home purchase. The Federal Housing Administration is backing these loans, and has developed programs that are more flexible than conventional mortgages in terms of down payments, qualifying ratios, and credit requirements. FHA loans are either fixed rate or adjustable rate mortgages, and there are loan limits set by HUD depending on what part of the country you reside. If you are a first-time homebuyer with limited funds, check with you local lender about government loan programs. VA Loans - You served your country, now your country would like to return the favor. Loans guaranteed by the Department of Veterans Affairs have made it possible for many veterans to own home without having to save for a down payment. To qualify for a "no money down" VA-backed loan you must have served (181) days during peacetime if you enlisted before September of 1980, or 24 months if you enlisted after that date; (2) have served at least 90 days during wartime; (3) be the unremarried spouse of a veteran who died in service of has been captured or listed as missing in action; (4) have been honorably discharged. The current maximum VA mortgage is $203,000. Veterans are charged a 2 or 3% funding fee, which can be financed into the mortgage. There is no mortgage insurance with a VA loan. If you are eligible, and have little or no money for a down payment, this is definitely the best way to finance your new home. NIV Loans - NIV stands for "no income verification" and believe it or not, there are loans availavle to borrowers who for one reason or another cannont substatiate their income or earnings power. These loans usually carry higher interest rates, and a larger down payment (at least 20% or more) is required. A major deciding factor as to whether a borrower is qualified under one of these programs is having excellent credit, a very marketable piece of property, and substantial cash reserves. In the same family with "no income verification" loans, are no ratio loans and no state income loans.

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