Fixed-Rate Mortgage
Borrower is locked into a fixed interest rate.  The corresponding principal and interest payment are also locked. They remain constant throughout the life of the loan.

• Stable and predictable
  
• Makes future budgeting easy.
  
• Protection from rising interest rates

• Interest rates are higher than initial interest rates for other types of loans
  
• Doesn’t benefit you when interest rates fall

• You prefer to be conservation and not take risks
  
• You plan to be in your home for more than 5-7 years
• Interst rates are low

Adjustable-Rate Mortgage (ARM)
Based on various index.  Borrower agrees on an initial interest rate that will change periodically. Payments rise and fall accordingly.  Principal remains constant, interest portion changes.

• Interest rates are mostly lower than fixed-rate mortgages at the beginning .
  
• If interest rates fall, your payments go down

• Borrower takes the risk on the rise and fall of interest rates
  
• Exact amount of Future payments is uncertain.

• Interest rates are high
  
• You plan to keep the home for a short time
  
• You expect an increase to your income

Balloon Mortgage
Starts out as a regular fixed-rate mortgage but has a shorter mortgage term, usually 5-7 years, and requires borrower to pay off the balance at the end of the term.

• Interest rates and monthly payments are lower than for traditional fixed-rate mortgages
  
• Predictable payments for term of loan

• May require refinancing at whatever rates are available at the end of the loan term, if borrower chooses to keep the home
  
• Unpredictable situation after loan ends

• You plan to keep the home for a  short time
• You expect to be able to payoff the loan due to a sale.

Government Loans
Federal Housing Administration (FHA) and Veterans Administration (VA) 

• Often a lower down payment than traditional bank loans
  
• Insured by the government

• Limited to government approved  properties .

• You should be a veteran—VA Loan
  
• You are buying a lower-priced home with minimal down payment

Convertible ARM
Starts out as a typical ARM but provides an option to lock in a fixed rate without refinancing. This option is available after passage of certain time.

• Initial Interest rate  is generally lower than fixed-rate mortgages
  
• Locked-in, predictable payments after conversion

• Borrower takes the risk on the rise and fall of interest rates for at least the initial period of time

• Interest rates are high