Here are a few Home Loan Options.

Selecting a Loan
FHA Financing (Federal Housing Administration)
The FHA has guaranteed the repayment of the loan to the lender. Since there is less risk involved for the lender, a smaller down payment is often possible. With FHA loans the borrower is required to pay mortgage insurance premiums. The amount of the premium will vary so check with your lender. Both adjustable and fixed rate loans are available with FHA financing.

Conventional Financing
This type of loan refers to home loans that have not been guaranteed by the FHA or VA. These loans may require a larger down payment, or the purchase of private mortgage insurance. Both adjustable and fixed rate loans are available with conventional financing.

VA Financing
This type of loan refers to home loans guaranteed by the Department of Veterans Affairs. On primary residences, qualified veterans may obtain mortgages from an approved lender without a down payment. Only fixed rate loans are available with VA financing. The VA charges the borrower a processing fee.

Consider a fixed rate loan if:
-You want the security of knowing your house payment will never change.
-You expect interest rates to go up while you are in the home.
-Your income will stay about the same.

Consider an ARM (Adjustable Rate Mortgage) if:
-You want to afford more house than a fixed rate loan will allow.
-You expect interest rates to stay the same or go down while you are in the home.

A 15 year v. a 30 year loan.
The difference in payments and overall savings between a 15-year fixed-rate loan and a 30-year fixed-rate loan depends on the interest rate and the loan amount. Using a $100,000 loan and 7.25% interest rate as an example, monthly payments on the 15-year note would be $912.86. Monthly payments on a $100,000 loan at 7.25% fixed for 30 years would be $682.18.
The 15-year note offers the opportunity to save considerable money over the life of the loan, since the period of amortization is half that of the 30-year note. This means that the total interest paid on a 15-year note as compared to a 30-year note is significantly less. A shorter loan term generates less mortgage interest, reducing your mortgage interest reduction . It also requires you to make larger monthly payments. However, a shorter loan term allows you to pay off the loan sooner and invest elsewhere. Calculating the overall savings of the 15-year note over the 30-year note depends on several individual circumstances, such as the borrower's changing income status.

Loan terms do not have to be 15 or 30 years. Since these periods are the two most common periods for mortgage loans, they are used as defaults.

Adjustable Rate Mortgage (ARM)
An adjustable rate mortgage (ARM) has a rate that can change, causing your monthly payment to increase or decrease.

What about splitting my mortgage in two and paying bi-weekly?
Some people set on paying off their home loan early and reducing interest charges opt for a biweekly mortgage. Monthly payments are divided in half, payable every two weeks.
Because there are 52 weeks in a year, the program results in 26 half-payments, or the equivalent of 13 monthly payments per year instead of 12. Using the biweekly payment system, a homeowner with a $70,000, 30-year biweekly mortgage at 10 percent interest could save $60,000 in interest and pay off the balance in less than 21 years.

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