Go to
www.bankrate.com and learn all of the terms. An ARM is a good thing if you kow for sure that you do not want to stay in the area for a long time. It offers lower rates and payments as well. The only down side is when you stay longer than the term and have to refinance which will cost you more money. 7/1 ARM sounds good but you need to sell before that time comes up. Definately search around for low rates and try not to pay for any points if you can help it. The lower the better. Take into consideration of not just the mortgage payment but also insurance, HOA fees, maint fees when considering how much to spend or what your payments will be. Often several hundred dollars area added to the mortgage. Don't start paying off all of your debt either. Best to keep cash on you until you purchase the home. Lenders like it when you have cash in the bank. They only look at the minimum payments anyway for all you debts. Hope you have good credit since that will affect your loan rate. Try to put down enough to avoid PMI (Private Mortgage Insurance) as the will add to your payment. Some people can and some can't. Close on the property on or near the last day to avoid paying for insurance and other fees that are prorated for the month. Were you ever in the military? Use the VA certificate. Go to
www.va.gov for more info. Research is your best friend and try to use a national or well known bank when dealing with these matters. Saving a couple of bucks with another bank could lead to trouble later. Find a good realtor as well to get the best price for your home. If military or prior service, use USS Movers Advantage Program. Hope this helps. The Bankrate website has a ton of answers and give you a better idea of everything. Learn the terms! Points, PMI, HOA, and so forth.