The type of loan that you need varies on a few things; how long do you plan on staying in your home, if your income is fixed or does it vary, what are your expectations of income in the future.

A buydown rate is when you are able to pay additional points up front to have the rate reduced.

Points are based on a percentage of the loan amount the lender charges. Points are often referred to as basis points with 100 basis points equaling 1%.

Typically the higher the better, but a minimum credit score of 640 is required for most loans.

APR stands for annual percentage rate; it is the costs of borrowing expressed in an annual rate.

The debt ratio is a percentage of your debt to income. There are two ratios, the top ratio and the bottom ratio. The top ratio is the housing ratio; this is the total housing debt, i.e, mortgage payment, taxes and insurance divided by your income. The bottom ratio is called the debt ratio, and it is the total of all debt obligations, housing, credit cards, loans divided by income.