Advantages of Fixed-Rate Mortgages:

	Assures a consistent payment amount. You won't have to worry about an increase in the payment amount.
	Avoids the mortgage being "called," meaning that the full loan amount would have to be paid immediately.
	Locks in an interest rate in the event of increasing rates.

Advantages of Adjustable Rate Mortgages:

	Enables you to take advantage of declining interest rates.
	Monthly mortgage payments could go down in the event of declining interest rates. But be cautious! Your monthly mortgage payments will increase if interest rates go up.
	It is an appropriate financing method if you expect your income to increase and you can handle increased payments due to rising in interest rates.
	It is a good type of loan for first time buyers who need to keep initial mortgage payments as low as possible.

One possible strategy: Capitalize on the lower initial mortgage rate that an ARM provides. If the ARM proves too expensive, refinance your mortgage to a fixed rate loan.

When you select a lender for your mortgage, make sure to choose someone who will listen to your unique needs and present all the options. Be sure to get a "Good Faith" estimate of costs from any lender you choose. Get an explanation of any and all costs outlined.

Compare the "total costs" for the various loan products. Add up:

	points
	closing costs
	payments over different time periods (5, 15, and 30 years)

Determine prevailing interest rates by calling different types of lenders:

	commercial banks
	savings banks
	credit unions
	mortgage lending companies

Determine the mortgage's terms such as:

	duration of the loan, either 15 or 30 years
	possibility of a balloon payment
	fixed or adjustable interest rate

Determine the costs for initiating this mortgage:

	points/loan origination fees
	appraisal fees
	closing costs
	processing fees
	cost of a credit check