There are 3 basic types of home loans

  Fixed Rate Mortgage

• Plan to live in your home more than 5 years
• Like the stability of a fixed principal/interest payment
• Don't want to run the risk of future monthly payment increases
• Think your income and spending will stay the same

  Adjustable Rate Mortgage

• Plan to live in your home less than 5 years
• Don't mind having your monthly payment periodically changed (up or down)
• Comfortable with the risk of possible payment increases in future
• Think your income will probably increase in the future

  Combination Rate Mortgage

• Want the stability of a fixed principal/interest payment in the short term
• Want to repair your credit by demonstrating your ability to make regular payments, then refinance for a lower interest rate
• Have a lot of consumer debt (these loans typically allow more)
• Want to borrow more and get a lower monthly payment than a standard fixed rate loan