When you are hunting for a mortgage, you will find that there are many different types of mortgages available. I will list some of the more common ones and their uses.

15 vs 30 Years

Your mortgage term can be just about anything you choose. 15 and 30 year terms are popular these days, although 10 and 20 years also are available.

The shorter the term, the lower the interest rate. But the main attraction of shorter term mortgages is the money you save.

For example on a $200,000 mortgage with a fixed 4.5% rate, you would pay $1013.38 a month for 30 years and $1529.99 a month for 15 years. Over 30 years you would pay $364,816.80 versus $275,398.20 over 15 years, a savings of $89,418.60 or 24.5% in interest.

If you cut a very conservative quarter of a percent off for reducing the lenders exposure by 15 years, your savings will be nearly 26%.

Adjustable Rate Mortgages (ARM )

ARM