So you have decided to finally make the jump and purchase your first home. One of the first steps in this decision is to find a lender who will approve you for a mortgage. It is important that you understand your options so you and your lender can find the one that fits the needs of you and your family the best.

Fixed Rate Loans - The interest rate and your mortgage monthly payments remain fixed for the period of the loan. Generally, the shorter the term of a loan, the lower the interest rate you could get. This is a great option if you plan to stay in your home for a long period of time and are on a fixed budget.

Adjustable Rate Loans - Is a loan whose interest rate, and accordingly monthly payments, fluctuate over the period of the loan. The index for your particular loan is established at the time of application. At the end of your ARM your interest rate could increase, thus increasing your monthly payments. Most people re-finance before their ARM is up.

Balloon Loans - Balloon loans are short-term fixed rate loans that have fixed monthly payments with a lump sum payment at the end of its term. Usually they have terms of 3, 5, and 7 years. The advantage of this type of loan is that the interest rate on balloon loans is generally lower than 30- and 15- year mortgages resulting in lower monthly payments. The disadvantage is that at the end of the term you will have to come up with a lump sum to pay off your lender.

Graduated Payment Mortgages - Graduated payment mortgages have payments that start low and gradually increase at predetermined times. Lower initial payments allow you to qualify for a larger loan amount. The monthly payments will eventually be higher in order to catch up from the lower payments.

These are just a few of  your options when it comes to home loans, it is important to find a qualified lender who understands your situation and can help you and your family make a smart choice. Purchasing a home is a huge choice and you need to be sure to make the best decision possible. For help purchasing your next home contact one of our qualified agents, we will work with your lender to help you find the home of your dreams. www.yoursummitrealestate.com