The best way to choose a mortgage is to see all your options side-by-side. There are a lot of different kinds of mortgages out there, but in the end, they all fit into one of three categories.

Conventional Fixed Rate Loans

KFM offers fixed rate mortgages for 30, 20, 15, and 10 years. These programs provide the security of knowing that your interest rate and payment are set for the life of the loan. The 30 year fixed program offers up to 100% Loan to Value. The 10, 15, and 20 year fixed programs offer the opportunity to build equity in your home at an accelerated rate and generally offers lower interest rates than the 30 year fixed.

The interest rate and monthly payments on a fixed rate loan are usually higher than the initial rate and payments on adjustable or balloon mortgages. The best thing about a fixed rate mortgage is that it is easy to manage. There are no surprises. The check that you write each month is the same year in and year out.

Adjustable Rate Mortgages

KFM offers 1, 3,, 5, 7 and 10 year adjustable rate mortgages (commonly called an "ARM"). These programs offer a fixed initial interest rate and monthly payment but then both adjust on a regular basis to reflect changes in the market interest rate. These mortgage loans must specify how their interest rate changes, usually in terms of a relation to a national index such as (but not always) Treasury bill rates.

As the interest rate fluctuates, your mortgage payment will be adjusted up or down. Rates and payments adjust at the end of 1, 3, 5, 7 or 10 years throughout the life of the loan according to the program you choose. Adjustable rate mortgages come with adjustment caps, giving you the security of knowing that your rate can never go above a certain level. With an ARM, you get a low initial interest rate and payment in exchange for taking the risk that rates may rise in the future.

For certain people, an ARM is the right mortgage. It allows you to fix the interest rate for the length of time that you plan to hold the loan without paying extra for interest rate protection you don't need.

Balloon Mortgages

Balloon mortgage loans are short-term rate loans with fixed monthly payments for a set number of years followed by one large final balloon payment ("the balloon") for all of the remainder of the principal. Typically, the balloon payment may be due at the end of 5, 7 or 10 years. Borrowers with balloon loans may have the right to refinance the loan when the balloon payment is due, but the right to finance is not guaranteed.

Balloons are like 30 year fixed rate mortgages, but after the first five or seven years, you have to repay t he entire loan balance.

Government Loans - VA Loans, FHA Loans, KHC (Kentucky Housing), RHS (Rural Housing)

VA Loans - Fixed rate loans guaranteed by the U.S. Department of Veterans Affairs. This loan program is available to U.S. veterans, reservists, active-duty personnel, and surviving spouses of veterans with 100% entitlement. It is possible to obtain a VA loan with no money down. The maximum VA loan amount is currently $203,000.

FHA Loans - 3.5% down payment program

KHC Loans - Kentucky Housing Corporation down payment assistance program primarily first time home buyers. 

RHS Loans - Rural Housing (USDA Loans) 100% financing in qualified areas.

Special Programs

• Extended rate locks — up to 6 months
• Construction loans
• Jumbo loans
• 3.5% down payment loans
• 0% down payment loans
• Bridge loans
• Low Doc loans
• Home Equity loans
• No closing costs loans
• First time home buyer programs
• Buydown loans