Different types of loans, benefits and disadvantages. 

For too long the mortgage industry has been acting with a caveat emptor (let the buyer beware) attitude.  Regulatory disclosures continue to be too difficult for the average consumer to understand.

Presently Loan Shopping?

Keep in mind that you should not allow each lender to run your credit report, too many inquires can lower your FICO score.   When shopping ask each lender:

1) When do you lock in the interest rate?
2) Is there a charge for the lock in?
3) How long is the lock?
4) If interest rates go down (prior to closing) may I get the lower rate
5) Ask the lender to provide you with a list of all of the lender fees and a separate list of fees charged by others (escrow, title, etc.)

If you are shopping for anything but a 30 year fixed rate loan you need to ask another set of questions:

1) What is the initial rate?
2) How long will that rate be in effect?
3) At the time of my first adjustment what is the maximum my interest rate can be?
4) What is the maximum the interest rate over the life of the loan?
5) Is the loan assumable?
6) Is there negative amortization?

The Mortgage Time Bomb

That ridiculously low-rate ARM seemed like such a good idea at the time. But now, payments will be coming due in a big, big way. If you are thinking of using pay option ARM / pick a payment loan to purchase a home, get a clear understanding of how the pay option arm works with this pick a payment mortgage calculator.