The best home loans are greatly dependant on your needs.  Many “old school” home buyers will say that there is no way that you should do any type of adjustable rate or exotic mortgage.  The younger generation seems to be quite excited about these types of home loans.  Many young business professionals know they are not going to stay in a home for more than five years so it behooves them to get an ARM and just refinance the mortgage when need be; many times they are in and out of the house before the rate adjusts anyway.

This has come back to bite many home owners recently.  Many young professionals thought they would be promoted or would be making more money so it was not a big deal to have an adjusted rate.  Well, they did not think that the economy was going to turn south and they could actually lose their job.  Unfortunately, even if you are making less money, these home loans are going to reset when they were written to reset no matter what.  This is why some of the best home loans are not adjustable.

If you want to have complete security in knowing what your mortgage rate is going to be, it is wise to get a fixed rate mortgage.  Some people feel this is the best home loan no matter what the situation.  I would not agree with that, but I would agree that most home owners should get a fixed home loan if they do not have a great knowledge of finances and the housing market.  Many home owners just jump into ARMs or exotic mortgages because they see the initial rate is going to be low.  That is all fine and dandy, but what does it matter how low the rate is going to be if your home is going to decline 20% in value over the next six months.

Ultimately, the best home loans are ones that fit your exact needs.  You need to analyze your current situation and decide what you feel comfortable with.  If you want the security of knowing that you are going to get the same rate every month for the lifetime of your loan, a fixed rate mortgage is the best way to go.  If you are extremely savvy with your finances and you are confident that you are going to move out of the current home within five years, an adjustable rate mortgage may be your best home loan.