One important choice regarding your mortgage is whether to go with a fixed-rate or an adjustable-rate loan.
A fixed-rate mortgage, as it sounds, has the same interest rate and payment amount for the entire repayment term. Due to its predictability, this is considered the best option for people who plan to stay in a home (and keep the same mortgage) for many years to come.
The adjustable-rate mortgage loans (ARMs) have an interest rate that will change at pre-determined intervals, over the life of the loan. Most ARM loans have a fixed rate for the first few years, after which the rate begins adjusting (hybrid ARM).