1. Down Payment

2. Fico Score

3. Appraised Value

4. Loan Product Type

5. Reserve Funds

Adjustable Rate versus Fixed Rate

An adjustable-rate mortgage (ARM) is a loan with interest rates that are adjusted periodically based on changes in a pre-selected index. As a result, the interest rate on your loan will rise or fall with increases and decreases in market conditions. If interest rates rise, you can expect to see an increase in what you pay monthly and if interest rates decrease your payment could go down depending on the margin on your loan.

An adjustable-rate mortgage often comes with an interest rate cap, which limits the amount by which the interest rate can change; look for this feature when you consider an ARM loan. Whether you’re buying your first home or refinancing, an adjustable-rate mortgage is still a popular option. Depending on your housing needs ARM’s are available in 1, 3, 5 and 7 year options.

Fixed-rate mortgages have interest rates that do not change over the life of the loan and as a result, monthly payments for principal and interest do not fluctuate. Fixed-rate mortgages typically have a 10, 15, 20, 25 or 30-year term (though they can be of any length the borrower and lender agree upon) and with a fixed-rate loan, you can have the assurance to know how to know your principal and interest payment never changes over the life of the loan.