Trying to understand the differences between mortgage products can be confusing. Compare the following:

• Mortgage Rates

Rates vary from mortgage to mortgage and from lender to lender. 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 (a loan term is simply the length of 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, and other costs such as closing costs when comparing different mortgages.

Look at the big picture. Make sure you understand the specifics of the loan you choose:

• If your mortgage rate is very low, know if it is an introductory rate or an ARM "teaser" rate – and when it can change. An initially low rate is not always the best option if it increases dramatically over the life of the loan.
  
• Think about your future plans and your plans for your home. If you want to own the home for a long time, you might choose a different mortgage type and term than if you plan to sell in a few years.