You are ready to buy a house. You have saved some money for a down payment. The next step is to find a way to finance the home that you have been dreaming about. Below is a list of several mortgage loan types to help you decide which is right for your situation.

Fixed Rate Mortgage - A fixed rate mortgage loan is one where the payment does not change during the life of the loan. Fixed rate loans tend to have a slightly higher interest rate, but the rate remains the same even if the market rate goes up. Borrowers with excellent credit often qualify for a loan of this type.

Fixed rate mortgages come in 50-, 40-, 30-, 20-, 15, and 10-year terms. Thirty-year mortgage loans are the standard, but more and more, homeowners are opting for early payoff of their home loans. Someone who wants to pay off their home loan in half the time would choose a 15-year mortgage loan.

Adjustable Rate Mortgage - This type of mortgage is abbreviated and more commonly known as “ARM”. An adjustable rate mortgage starts at one point, but can go up or down each time the interest rate adjusts. Borrowers can specify if they want to have the option of an adjustment each year, every three years, every five years, twice a year, and so forth.

The thing about this loan type is that each percentage that it goes up increases your monthly mortgage payment. For the sake of finances, a 5-year ARM guarantees your interest rate for the longest time without any changes. By the same token, if the interest rates drop within that period, you could miss out on lower payments so definitely take into consideration the market not only at the time you purchase your home, but also what it may be like years down the road.

Balloon Mortgages - You’ve heard of balloon payments? A balloon mortgage has a set interest rate just like the fixed rate mortgage loan. After that time, the rest of the loan comes due in one “balloon” payment, hence the name of the mortgage loan. Whilst not for the average mortgage loan shopper, this type of loan works for buyers that expect a short turnaround time before they sell the property.

FHA Mortgage Loans - This is a government insured loan program that helps buyers with less than perfect credit and first-time buyers to finance a new home. The amount of the loan differs depending on where you live, but the down payment for an FHA loan is as little as three percent at closing. For a family trying to afford their first home, this helps to save money for things like home furnishings and any improvements they may want to do on their new house.

VA Loan - This loan is offered to veterans of the Armed Forces. Veterans that meet the requirements can qualify for loan to finance their new home. There is no down payment on this loan in most cases.

Two-Step Mortgage - A mortgage of this type comes in two phases. The first phase consists of a fixed interest rate for a specified period of time. After the time elapses, the rate of the loan adjusts to an interest rate where it will remain for the rest of the loan period. The amount of the adjustment depends on the particulars of the individual loan.

There are also many variations of the above mentioned loans, so talk to a reputable lender for further options before deciding which is best for you. Even if your credit is not the best, you can still get a manageable loan that puts you in the home you want.