A mortgage is a pledge of property to secure the repayment of a debt. A lender will ask you for specific information regarding your source of income, the assets you own, and the debts you owe. The lender needs this information to determine whether you qualify for the amount you need. The first step in choosing a mortgage is to understand the pros and cons of the various types of mortgages available. The most common type of mortgage is the fixed rate or conventional mortgage. A fixed-rate mortgage has the benefit of having a fixed principal and interest rate which is determined up front. You then make regular monthly payments for a period of fifteen, twenty, or thirty years until the loan is paid off. Another common type of mortgage is the Adjustable Rate Mortgage or ARM. An ARM has a variable interest rate which changes on a regular basis, such as once a year, based on an established index. With an ARM, the total amount of the loan cannot be determined up front and your monthly payments may fluctuate throughout the life of the loan. In most cases, however, there is a cap on both the interest rate and your monthly payments. If you’re a first-time homebuyer, contact lenders in your state to see if there are special programs available to you. The Federal Government also offers special programs such as Federal Housing Authority, or FHA and Veterans Administration, or VA loans. FHA and VA loans require low or no down payments. Another consideration when shopping for a mortgage is the question of whether or not to pay points. A point is interest that you prepay when you close on your new home. Each point is one percent of the loan amount. If you can afford to pay more cash up front, consider paying a few points in return for a lower overall interest rate. For additional information, consult a mortgage lender.