Choosing the right type of mortgage

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Mortgages: Home Loans on the Web

Buying a first home is an important milestone in anyone's life. But even if it's your fifth home purchase, the financial jargon and seemingly endless paperwork involved in getting a mortgage can overshadow the excitement of owning your new home. On the Web you'll be able to find resources that help you understand what a mortgage is and how it works; decide which type of mortgage works best for you; find a reputable lender; and even understand what happens after you get your loan. For a Spanish-language version of the Guide, click here.

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How does a mortgage work?

It would be nice if getting a mortgage were as simple as asking for one and then getting a check in ... read more »

Choosing the right type of mortgage

Choosing the right type of mortgage can be as important as choosing the right home. Instead of wandering into a lending institution and letting them lead you through their mortgage process, take the lead yourself by researching the different types of mortgages online and seeing for yourself what's out there. The Web sites in this section help you figure out how much to borrow and how to borrow it by providing unbiased information that's easy to understand.

Dulcinea's Insight

The two basic types of mortgages are fixed-rate and adjustable-rate mortgages. A fixed-rate mortgage has an interest rate that's set when you first borrow the money and never changes over the life of the loan; adjustable-rate mortgages have interest rates that can go up or down depending on changing federal interest rates.

There are lots of different versions of the two basic mortgage types; for additional information about different types of mortgages try the sites listed below or try searching for a definition in a search engine, like this: "definition: balloon mortgage."

Dulcinea's Picks

To figure out how much loan you can afford ...

Mortgage-calc has almost every finance-related calculator you could ever need: mortgage, amortization, debt consolidation, mortgage refinancing, and others. This site even has a calculator that tells you how long it will take you to become a millionaire.

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CNNMoney has real estate calculators that help you decide how much house you can afford and what your monthly payments will be, as well as a cost-of-living calculator.

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To help you choose the right type of mortgage ...

RealEstate.com has a finance center with helpful articles and guides (from quickenloans.com). You'll find mortgage rates, mortgage calculators, and articles like "How To Choose the Right Loan." This site is affiliated with Lending Tree.

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MSN Money has some tips and articles that can be helpful when considering your mortgage. In the "Home financing" section, you'll find advice like "8 big mortgage mistakes to avoid" and "Don't rush to pay off that mortgage."

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The Federal Reserve Board , in its brochure about understanding the home mortgage process, has this "Where to Shop and What to Look For" section about how to get started shopping around for a home loan. It suggests going to your banking institution first, and discusses mortgage considerations such as ARMs and the difference between government-insured and conventional mortgages. The Federal Reserve Board also has a consumer handbook about adjustable-rate mortgages (ARMs) that shows you how they work and gives some consumer cautions to consider before getting an adjustable-rate mortgage.

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For information about rates and points ...