30-Year Fixed

• A 30-year fixed-rate mortgage was once the industry standard for home loans. Although creative lending provides you with other alternatives, a 30-year fixed-rate mortgage provides you with payment security. Because the interest rate is fixed for the life of the loan, you do not have to worry about your mortgage payments increasing unexpectedly -- making the 30-year fixed-rate mortgage a budget-friendly choice.
  
  

Adjustable Rate Mortgage

• An adjustable-rate mortgage (ARM) is any mortgage on which the interest rate changes over time. ARMs typically carry a low interest rate for a set period. Once this period, which can range from one year to five years, passes, the interest rate will adjust either up or down -- increasing or decreasing your mortgage payments. ARMs are particularly advantageous to individuals who do not intend to remain in the home for a long period. If you're planning to sell your home before the interest rate adjusts, an ARM will provide you with much lower monthly payments than a 30-year fixed-rate mortgage.
  
  

Reverse Mortgage

• Available only to senior citizens, a reverse mortgage is a loan against your home's equity. Instead of paying a lender each month, the lender pays you a stipend based upon your home's value. The loan comes due when the borrower either dies or moves to a new residence. Reverse mortgages provide elderly individuals who own their homes a stable monthly income in addition to Social Security and/or a private pension.
  
  

Government Mortgage

• Government mortgages, such as FHA and USDA mortgages, are not provided by the government itself. Rather, the government insures these loans for private lenders. Because of the additional security provided by the government's backing, borrowers benefit by having to make a lower down payment. Borrowers who qualify for a VA loan through the Department of Veterans Affairs enjoy a bonus to low down payments -- they are not required to pay closing costs.
  
  

Second Mortgage

• Commonly known as "home equity loans," second mortgages provide you with a method of liquidating the equity in your property. A second mortgage allows you to take out a loan based on the difference between your home's value and how much you owe your primary mortgage lender. Second mortgage loans give homeowners the ability to make large purchases or pay off debts.