First time buyers of a home can be a little confused by the vast array of mortgage loans that seem to pop up everywhere and are filled with phrases like “fix rate loans”, “adjustable rate loans” or “no down payments mortgage loans.” There are many options in borrowing money for a mortgage and the key is finding the best mortgage loan for your needs and situation.

If you are a first time home buyer, it can be difficult to save enough money to put a 20 percent down payment on a mortgage and have enough left over for closing costs. Many mortgage loans do not require such a large down payment, especially for first time home buyers. However, the lending institution will probably require that you pay mortgage insurance each month which insures the bank they will get the mortgage paid. It is not insurance for the buyer, but the bank even though the buyer pays the premiums.

Mortgage loans that have fixed interest rates are usually set for 30 or 15 years. Adjustable rate mortgages can start with a lower rate that is fixed for 1, 3, 5 or even 7 years, but then will adjust each year for the length of it's period.

In selecting mortgage loans that meet their needs home buyers can choose the fix-rate 30 year mortgages with good interest rates and a fixed payment for the life of the loan. These payments will be lower than the 15 year mortgage loan that is paid off if half the time.

Lower payments are always an enticing option on any home mortgage. With an interest only mortgage, payments are low, interest is tax deductible in most cases and the dreams of owning a home are more easily realized. Home mortgages where only interest is paid at first can provide a little added money when you need it most – right after purchasing a new home.

Interest only mortgage payments are generally outlined in the agreement where during the first few years of the home mortgage only the interest on the loan is required to be paid each month. After the initial period, both interest and principle payments would be made. Interest only mortgages don’t defer the interest, since you are making those payments from the beginning, but they do take longer to pay off should you not pay down any of the principle for those first few years.

The advantages of an interest only mortgage can really be seen if you plan on owning the property for a very short time or paying off the loan quickly. Since the majority of the house payment is interest for the first several years, you can keep the extra cash in your pocket when it’s needed most. The future may hold a higher income for you and a higher appraisal on the home when you resell.

Reverse mortgage can provide needed income to retirees .You’ve worked your whole life to own a home, and once it’s paid off you have a nice retirement asset that costs little more than the annual taxes and a few maintenance costs. Selling your home would give you a lump sum payment that may not last a life time and leaves you with the need to purchase a new home. An alternative that lets the equity in your paid-off home work for you is a reverse mortgage.

A reverse mortgage is just what it sounds like. Instead of making monthly mortgage payments to pay off the house, the bank makes you monthly payments from the equity in your house. When the owner either dies or sells the house, the remaining equity is theirs or their heirs. The advantages of a reverse mortgage are that the house is still yours and can continue to appreciate.