A wide selection of mortgages are available to you nowadays. Your challenge is to select the loan terms that are most favorable to your situation. There are various loan types that may be beneficial to your needs. These could be conventional loans, government loans, long term loans, short term loans, fixed interest rate loans or adjustable rate loans.

If, for example, you anticipate living in your home for many years, the interest rate may be the main factor for you. If you expect to keep the house for only a short period of time, the closing costs may be more important to you.

If you want to end any mortgage debt by the time you are facing your children's college bills or your own retirement, you may want to consider a shorter term loan such as a 15-year fixed-rate mortgage. If your own retirement is years away, you may be less inclined toward a shorter-term loan, preferring to extend payments over a longer period of time through taking on a 30-year mortgage loan.

How important to you is the certainty of a fixed mortgage payment each month? If you want to make sure your mortgage payment remains the same each month, then you'll want to focus on various fixed-rate loans. If you are comfortable with periodic changes to your mortgage interest rate, then you may be inclined to consider adjustable-rate mortgages.

The 30-year fixed rate mortgage, one of the most familiar types of home loans, is set up with a repayment schedule in which the total amount you borrowed and the interest charged are distributed in even payments over the term of the loan. Both interest rate and monthly payments remain the same for the entire 30-year loan period.

Interest rates can fluctuate without warning, and a fixed rate mortgage protects you from the risk of climbing interest rates. However, fixed rate loans can't take advantage of falling interest rates like an adjustable rate mortgage (ARM). If you decide on a fixed rate--meaning you're locked into one rate for the life of your loan--you could end up paying more than the market rate in the future. If interest rates are relatively low when you purchase or refinance your home--or if you expect rates to go up--a fixed rate mortgage could be a wise investment.

10-year, 15-year, and 20-year fixed rate mortgages are also available. These shorter term loans allow you to pay off your mortgage sooner, therefore paying less in total interest. Since the amortization periods are shorter, the monthly payments are higher. The 30-year fixed rate mortgage offers the lowest monthly payments of the fixed-rate mortgages, and is therefore the most affordable. Predictable low monthly payments for the life of the loan make this mortgage one of the best options for many people.