Selecting your mortgage is almost as important as selecting your home. There are many things to consider. What you decide may make a big difference in your monthly payments and in the overall cost of your loan

• What do you need to know?

  • Learn how to evaluate different mortgages
  • Understand mortgage rates
  • Understand the difference between adjustable and fixed mortgages
  • Know how 15 year and 30 year mortgages change your monthly payment
  • Understand monthly payments and closing costs

Evaluating different mortgage products can be confusing. Compare the following:

• Mortgage rates.
  Rates vary from mortgage to mortgage. Certain mortgage types and terms typically have lower interest rates .

• Mortgage types and terms.
  Fixed-rate and adjustable-rate mortgages each have their benefits, and so do different loan terms (the length of time you have to repay the loan). It's important to consider your individual situation, needs, and goals to determine the best mortgage type and term.

• Other factors.
  Be sure to factor in any points, fees, or other charges, including closing costs , when comparing different mortgages types.

Additional Options for Low Down Payments

Many first-time homebuyers think it's impossible to buy a home without a substantial down payment. There are many mortgages with low or even no down payment options available. Ask your lender about mortgages with low down payment options, including:

• Down payments as low as 0% (these mortgages often require you to make a contribution to the closing costs from your own funds).
• Additional sources of money for down payment or closing costs and gifts from family members.
• Expanded debt-to-income ratios .
• Options for people with limited incomes in high-cost areas.
• Options for people with past credit challenges

Next: Downpayment and Closing Costs