For most of us, buying a new home means finding a loan. There are many types out there, so it is important to understand what your options are. Loans can have fixed or variable interest rates.
Fixed rate loans mean you make the same principal and interest payments during the loan term.
Variable rate loans can have a number of "indexes" and "margins" which determine when and how the rate and payment amount change. Most loans can be paid for over a period of up to 30 years.
Usually the price of a home mortgage loan is stated in terms of an interest rate, points or other fees. A "point" is a fee equal to 1 percent of the loan amount. Sometimes you can pay fewer points in exchange for a higher interest rate or vice versa.
