If you're in the market for a home loan, here is some information about the various types of home loans available. This will help you decide what kind of loan is best for your.

The most common home loan is the 30 year fixed mortgage. By 'fixed' we mean that the rate of interest is fixed for the length of the loan. The advantage of this type of loan is that the interest rate cannot change.

The second most popular type of home loan is the adjustable rate mortgage, sometimes called the ARM. With this type of home loan, the interest rate on the loan will vary with the previaling market rate. The advantage of this type of loan is that the interest rate usually starts out lower than the fixed loan. This means a lower payment for you. However, if rates increase in the future, then your payment will increase. In the 1970s many homeowners with adjustable rate mortgages watched in horror as their interest rate increased to 17% or more.

A relatively new type of home loan is the interest only loan. With this loan the buyer pays only the interest on the loan for a few years. Then the loan reverts to one of the more traditional types (30 year fixed or ARM). The advantage of this type of loan is that more potential buyers can qualify for the loan because of the lower initial costs. The disadvantage is that when the loan converts to one of the more traditional types, there will be a large increase in the monthly payment. If you can't afford the increase, you'll lose your house.

When looking for a home loan, the best path to take is to compare loans from different sites. And by all means contact your local financial institutions. Often the best deals are not on the net but down the street.