Purchasing a new home brings with it a host of questions. Perhaps even more important than the size of the home are mortgage loans. So before you get too wrapped up in how many bedrooms that you want in your new home, maybe consider spending some time considering which type of mortgage is best suited for you.

The fact of the matter is that a mortgage is a product, and as a product, mortgages are priced competitively. In addition to being priced competitively, there are a variety of different mortgages to choose from. This article will focus on two types of mortgages — the adjustable rate and the fixed rate mortgage.

When we talk about rates, we are referring to the amount of interest that is charged on a loan. With a fixed rate mortgage, the interest rate remains constant throughout the life of the loan, which is typically 30 years, but oftentimes only 15 years. You can expect that fixed rate mortgage loans charge a higher rate than an adjustable rate mortgage but at least you have the security of knowing that your payment will remain the same over the years. Because the rates are historically low right now, fixed rate mortgage loans are the more popular type of loan.

Adjustable rate mortgage loans, as the name indicates, start out with a lower interest rate but can adjust up after a period of years. This means that while your payment will start out lower than with a fixed rate loan, it could increase exponentially over the years. If you only intend to remain in a home for a short period of time, perhaps this is the loan for you. However, this loan does present some degree of risk to homeowners who plan on remaining in a home for an extended period of time