Fixed-rate mortgages are the most common mortgage for first-time homebuyers because they're stable. Typically the monthly mortgage payment remains the same for the entire term of the loan – whether it's a 15-year, 20-year, or 30-year mortgage – allowing for predictability in your monthly housing costs.

What are the benefits of a fixed-rate mortgage?

Inflation protection.

• If interest rates increase, your mortgage and your mortgage payment won't be affected. This is especially helpful if you plan to own your home for 5 or more years.

Long-term planning.

• You know what your monthly mortgage expense will be for the entire term of your mortgage. This can help you plan for other expenses and long-term goals.

Low risk.

• You always know what your mortgage payment will be, regardless of the current interest rate. This is why fixed-rate mortgages are so popular with first-time buyers.

There are additional considerations to be aware of with fixed-rate mortgages:

• Your mortgage interest rate won't go down, even if interest rates drop, unless you refinance your mortgage.

• Because the interest rate may be higher than other types of loans such as adjustable-rate mortgages, you may not be able to qualify for as large a loan with a fixed-rate mortgage.

• While your actual mortgage payment will not change, your total monthly payment can occasionally increase based on changes to your taxes and insurance. In many cases you can choose to pay these costs as part of your monthly payment through an escrow account that your lender keeps for you .
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Why choose an FHA-insured loan?

There are lots of good reasons to choose an FHA-insured loan, especially if one or more of the following apply to you:

• You're a first-time homebuyer.
• You don't have a lot of money to put down on a house.
• You want to keep your monthly payments as low as possible.
• You're worried about your monthly payments going up.
• You're worried about qualifying for a loan.
• You don't have perfect credit.

If any of these things describe you, then an FHA-insured loan may be right for you. Why? FHA-insured loans offer many benefits and a level of security that you won't find in other loans including:

Low cost: FHA-insured loans have competitive interest rates because the federal government insures the loans for lenders.

Smaller downpayment: FHA-insured loans have a low 3.5% downpayment and the money can come from a family member, employer or charitable organization as a gift.

Easier qualification: Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.

Less than perfect credit: You don't have to have perfect credit to get an FHA-insured mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA-insured loan than a conventional loan.

More protection to keep your home: The FHA has been helping people since 1934. Should you encounter hard times after buying your home, the FHA has many options to keep you in your home and avoid foreclosure.

You may use an FHA-insured mortgage to purchase or refinance a new or existing 1- to 4-unit home, a condominium or a manufactured or mobile home (provided it is on a permanent foundation).