No, there's no quiz afterward. But we hope this information on mortgages helps you in your homebuying process.

What exactly is a mortgage?

Simply put, it's a long-term loan which uses the home you're buying as collateral.

Are all mortgages the same?

No. There are 15-year mortgages and 30-year mortgages; fixed-rate and adjustable-rate; FHA, VA, and Conventional.

A 15-year fixed-rate mortgage is a 15-year loan with 180(15 x 12) monthly payments. A 30-year fixed-rate mortgage is made up of 360 equal monthly payments to pay off the loan. The payments on a 15-year mortgage are usually higher, but the loan is paid off more quickly, generally saving you thousands of dollars in interest.

While a fixed-rate mortgage has the same rate and payment for the life of the loan, an adjustable-rate mortgage(ARM) has a rate that can change over the life of the loan – usually in relation to a specified index such as the national mortgage average or the Treasury Bill rate.

An ARM can be advantageous because lenders usually charge lower initial rates on this type of loan, which might also allow you to buy more home for the same payment. If interest rates are stable or move lower, an ARM may be less expensive in the long term too. However...an increase in interest rates would mean that your rate would be adjusted accordingly, thereby increasing your monthly payments.

There are some important questions you should ask before you choose an ARM. For example, will your income rise to cover a higher payment if rates go up? How high can the rate go; is there a cap? Is the ARM convertible to a fixed-rate loan later, and will it cost you to do it?

There are three types of mortgage programs: FHA, VA, And Conventional.

An FHA (Federal Housing Authority) mortgage is a government-backed program that allows you to purchase a home with a low down payment--usually 5% or less of the home cost.

A VA (Veterans Affair) mortgage allows active duty military or veterans to obtain a guaranteed loan with little or no down payment.

A Conventional mortgage is not insured or subsidized by the government and usually requires a down payment of at least 20% of the home cost. The most common are the 15-year, 30-year, and ARM already mentioned.

Ask your lender for more details about what is right for you.

Where do you get your mortgage?

A variety of institutions offers mortgages, including banks, mortgage companies, and savings & loans. You could start shopping for your home loan at the bank you have your savings and checking. You should also shop a few other places. The newspaper is a good source for rates and other features of mortgages being offered. You may want to ask if the lender offers FHA and VA loans, and, if applicable, if there are special programs for first-time buyers or low-income buyers.

You should know that federal law prohibits lenders from discriminating against anyone on the basis of race, color, national origin, religion, sex, marital status, age, receipt of public assistance funds, familial status (children under 18), handicap, or exercising rights under other consumer credit protection laws.

Federal law also requires a lender to tell you, in writing, why a loan is turned down. If you are turned down, these reasons may help you satisfy the lender's requirements or improve your chances with another lender.

Remember: it is generally in the interest of the seller and the lender to help you. They want you to be able to buy your home. In other words...we're here to help!