A number of fixed-rate mortgage options exist in addition to typical fifteen or thirty year mortgages of this type. Such mortgage options can be preferable in some situations, depending upon your income level and the type of property you intend to purchase. Read on to learn more about a few of these options…

Pick-A-Payment: Although this type of mortgage is more common in adjustable-rate form (often called an “Option ARM”), fixed-rate mortgages of this type are available to home buyers as well. Wachovia offers a fixed-rate Pick-A-Payment mortgage option; according to their web site, it allows home owners to make either an interest and principal, minimum (actually increases the loan’s balance), 15-year, or interest-only payment each month. This can be useful for home owners who have a level of available funds which varies significantly from one month to the next, such as contractors who do most of their work during a few specific months of the year.

Interest-Only: A fixed rate interest-only mortgage lets the home owner make a predictable, relatively low monthly payment until its term has expired. However, none of the principal is paid off during this period of time, and (unlike with renting) property taxes still have to be paid. According to wikipedia.org, such mortgages tend to have an interest rate which is “slightly higher.” Interest-only mortgage options can be desirable for those who plan to sell their homes relatively soon or have a low income which they expect to significantly increase.

Balloon: Another one of the mortgage options available with a fixed-rate, balloon mortgages require a large payment to be made when their term expires. Wells Fargo has a “40/30″ fixed-rate balloon mortgage option; their web site indicates that payments are made over a forty-year period, but a “substantial” balloon payment (it states that this can be as high as half of the initial balance) is required after thirty years have elapsed. This type of mortgage is more likely to be the best choice for home owners who can afford to make extra payments or do not plan to continue living in the same home indefinitely.

In general, all three of the above-mentioned fixed rate mortgage options provide greater payment flexibility, but increase the overall length of the repayment time period. For the most part, these options are preferable for people who realistically expect their monthly earnings to become substantially higher over the next five to ten years.