Regardless of what currently swirls around in the world of finances, lending money remains the central reason for banks. When shopping the various banks lending money, it’s likely you’ll be considering services like LendingTree, mortgage brokers one or another of the top 10 banks – ranked in order of total assets:

1. Bank of America
2. Chase
3. Citibank
4. Wells Fargo
5. Goldman Sachs
6. Morgan Stanley
7. Metlife
8. Barclays, US
9. Taunus Corp.
10. HSBC North America
However, the biggest bank may not always be the best for the individual when shopping for a vehicle loan, a loan to expand business, student loans for educational advancement, or – arguably the most important type of loan – a home loan. Local credit unions are often excellent sources for lending money to individuals. They are knowledgable of the community and are familiar with local businesses and real estate values.

When shopping for a home loan, whether contemplating credit unions lending money or banks lending money, it’s wise to be savvy about the types of home loans available. The various names for home loans are frequently dropped without explanation, so here’s a bit more detail.

The most common home loans are:
1. Fixed rate mortgages
2. Variable rate mortgages

The term “fixed rate mortgage” means that the home buyer locks into an interest rate. That rate will be the rate of interest during the life of the loan until the home owner pays it off either by actually paying off the total amount of the loan, or by “refinancing,” often referred to as a “re-fi.” This is when a homeowner decides to go with a different loan, usually because the rate of interest is significantly less. Fixed interest rate mortgage loans are typically written to last either 15 years or 30 years.

Variable rate loans, commonly called an “ARM,” which stands for “adjustable rate mortgage” have a variable rate of interest. There are various types of ARM mortgages and people looking for banks lending money in the form of ARMs need to do their homework in understanding the different kinds of ARMs any bank lending money may offer.

An ARM can be a huge advantage, but it can also be a disaster. People need to become thoroughly apprised about any adjustable rate mortgage they’re considering and read the fine print carefully. Generally an ARM has an attractive and affordable monthly rate initially, but it can jump up to a level that makes the monthly loan payment challenging. The best approach with an ARM is to pay ahead on the principal so that, even if the interest goes up, the monthly payment is not unaffordable. Again, home owners with an ARM loan may choose to switch over to a fixed rate mortgage in order to have no surprises.

But no matter what type of loan you’re looking for, you are the customer. Be sure to get the loan that suits your needs.