Fixed-rate mortgages are offered in terms ranging approximately 30 years, with the 30-year alternative being the most popular, states Kirkland. Paying the loan off over a longer amount of time makes the month-to-month payment more budget-friendly. But no matter which term you prefer, the interest rate will not alter for the life of the home loan.

Under the terms of an adjustable-rate mortgage (ARM), the rates of interest you're paying might be raised or decreased regularly as rates alter. ARMs might a great idea when their rates of interest are especially low compared with the 30-year fixed, specifically if the ARM has a long fixed-rate period prior to it starts to adjust." Some examples of an adjustable-rate home mortgage would be a 5/1 ARM and or a 7/1 ARM," said Kirkland.

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