Considerations

• Before taking out a mortgage, consider whether you have the financial stability to make the payments. Don't forget the extra costs of owning a home, including insurance and property taxes.
  
  

Qualifications

• Before issuing a mortgage a lender will do a credit check to see if you have repaid prior debts. You also need to submit proof of your income in the form of pay stubs and W-2 forms.
  
  

Fixed-Rate Mortgage

• Most mortgages are fixed-rate mortgages with a single interest rate over the life of the loan. The most common fixed-rate mortgage terms are 15 years and 30 years. A longer mortgage means a lower monthly payment, but you will pay more in interest over the life of the loan.
  
  

Adjustable-Rate Mortgage

• Adjustable-rate mortgages, or ARMs, have a fixed interest rate for the first few years and then adjust with the market. For example, a 6/1 ARM would have the same interest rate the first six years and then adjust annually after that.
  
  

Interest

• The interest rate you pay on a mortgage is determined in part by your credit score. The higher your credit score, the lower your interest rate. The best interest rates go to those who have credit scores of 720 or more.