As the name implies, this product has a fixed rate of interest for the life of the loan.  That means fixed payments as well, which can be good or bad. Though there are some exceptions, fixed rate loans are generally amortized over a 15, 20, or 30 year period. Naturally, fixed rate loans offer certain advantages in terms of comfort and stability, but usually mean a higher interest rate and corresponding payments. You are protected if interest rates go up, but may need to
refinance in the event that rates go down.

The Adjustable Rate Mortgage or ARM, is a mortgage in which the interest rate, after a short initial period, can be changed by the lender. For the most part, the base rate on an ARM changes on a pre-selected interest rate "index" over which the lender has no control. These are known as "indexed" ARM's. The only discretion a lender has on an indexed ARM is with respect to the "margin" they charge. When the "margin" is added to the current "index" this determines the true interest rate, or what is commonly referred to as the "fully indexed" rate.

There are two phases in the life of a Fixed-Period ARM. During the first phase, the rate is fixed, just as it is on an Fixed Rate loan. The difference is that on a Fixed Rate product the rate is fixed for the term of the loan, whereas on an ARM it is fixed only for a limited period of time. At the end of that period, the adjustable phase begins, and in most cases the rate will increase.  The initial fixed period of rate stability generally lasts anywhere from 3 years to 10 years. In general, the shorter the fixed-period, the lower the initial interest rate. Borrowers often choose this product for the lower inital rate and view it as a stepping stone to help them achieve their desired goals.

With an Interest Only program, you have the "option" of paying interest only; this does not preclude you in any way from paying down principal. Interest Only can be very helpful from the standpoint that you are qualified at a lower payment, and thus have increased buying power. Many people like this option, and feel that they will accrue their equity by means of capital appreciation rather than principal reduction.

The Stated Income loan is attractive from the standpoint that there is no income documentation required; you simply state your income.  This is a make-sense product for those who are self-employed and often have difficulty showing adequate income after business expenses.  The rates on a stated income product are generally very comparable to loans requiring full documentation, especially if you have good credit.

The No Income-No Asset program is very effective for people who have difficulty providing evidence of both income and assets. This approach is all the more attractive if you have excellent credit and a considerable down-payment, say 20 to 25 percent.

This is a great product because No Doc means that not only is there no documentation required, but you are not even required to list employment. It is helpful if you have good credit with this approach, but it pretty much enables anyone with a pulse to get a home loan.    

As a homeowner, you can generally borrow the difference between the appraised value of your home and the amount you currently owe. Whether it be a Home Equity Line of Credit (HELOC) or a Home Equity Loan (HELOAN) it will normally be a second mortgage. With a HELOC, you have adjustable interest tied to the prime rate, and it is only charged against any outstanding draws.  A HELOAN is a fixed rate with fixed payments and usually requires a balloon payment at a specific point in time. Either way, you can use your equity for home improvements, debt consolidation, investment opportunities, or even a college education for your child.