There are four common types of mortgage loans. They are, Fixed Rate, ARM, Balloon and 2-Step.
Fixed Rate Mortgages
Fixed Rate Mortgages are exactly what the name sounds like. The payments remain the same for the life of the loan, generally 15 years or 30 years. Interest rates remain the same, so payments are predictable.
Adjustable Rate Mortgage
With an Adjustable Rate Mortgage, or ARM, payments increase or decrease on a regular schedule with changes in interest rates increases are typically subject to limits.
A Balloon Mortgage offers very low rates for an Initial period of time usually 5, 7, or 10 years when time has elapsed, the balance is due or refinanced though not automatically.
Interest rates adjusts only once and remains the same for the life of the loan.
Many other types are available, including government-insured mortgages like a USDA loans for rural properties, FHA loans for first time buyers and VA loans for veterans. Talk to home loan lenders and real estate professionals to assess your situation.