A mortgage is a loan that helps you finance the purchase of a home. When you take out a mortgage, you agree to make monthly payments over a set period of time, usually 15 or 30 years. In exchange, the lender agrees to give you the money you need to buy your home.

Mortgage rates are the rates charged by lenders for a mortgage loan. Mortgage rates can change daily, and they’re affected by many factors, including the type of loan, the length of the loan, the down payment, and your credit score. In general, the higher your credit score, the lower your mortgage rate will be.

Now that we’ve got that out of the way, let’s take a closer look at mortgages and mortgage rates so you can make the best decision for your situation.

There are two main types of mortgages: fixed-rate mortgages and adjustable-rate mortgages (ARMs). As you might guess from their names, the interest rate on a fixed-rate mortgage stays the same for the life of the loan. That means your monthly payments will stay the same, too. The most popular type of fixed-rate mortgage is the 30-year mortgage. But you can also get 15-year and 20-year mortgages.

With an ARM, your interest rate changes periodically — usually once a year — but it can change more frequently than that. The initial interest rate on an ARM is often lower than the interest rate on a fixed-rate mortgage because you’re taking on more risk: There’s no guarantee that rates won’t go up in the future. The most common type of ARM is a 5/1 ARM: Your interest rate is fixed for five years, and then it adjusts annually after that.

If you don’t want to get a traditional mortgage from a bank or credit union, there are other options available to you. For example, if you have friends or family members who are willing to help you finance your home purchase, they could give you what’s called a private loan or owner financing. With owner financing, the person selling you the home acts as the bank and agrees to carry the loan themselves. This option can be beneficial because it allows you to avoid going through all of the paperwork and red tape associated with getting a traditional mortgage from a financial institution. However, it’s important to remember that not everyone who owns a home is qualified or willing to act as a lender, so this option isn’t always available.

Mortgages and mortgage rates can seem like confusing topics, but they don’t have to be. Now that you know some of basics about mortgages and mortgage rates, you can start shopping for a home with confidence. Remember: If you have any questions along the way, don’t hesitate to ask your real estate agent or lender for help. They’re there to guide you through every step of the process so you can find your dream home in no time.