If you're thinking about buying a house, then you need to know everything you possibly can about getting a mortgage. This is a long and complicated process, and unless you fully understand what you are getting into, you could find yourself in hot water later on. The ultimate goal is to find a house you like, in a good neighborhood, that you can afford. While it sounds simple enough, there's a few potential problems you need to be aware of.

First of all, there are many different kinds of loans. If you've got really good credit, then you'll likely be offered a fixed thirty year loan. That means the interests rates will stay the same over the course of your loan. Fixed interest rates means that your payments will be the same every month, for thirty years. This is the best loan to get.

Unfortunately, not everybody can qualify for these. Well, that's not really true. But if you have credit that's not so good, you won't be able to afford very much each month. That means you won't be able to afford a very nice house. Since real estate agents know this, they come up with different loans that seem to be more affordable, but really aren't.

One type is called an "adjustable rate mortgage," or ARM. These seem cheap, but they are anything but. They don't have the same interest rate for the entire loan. They start of with really low rates for the first few years, usually five, and then the interest rates go up after that.

This means you'll get a really affordable payment for a few years, then they'll suddenly go up. If you are making more money, or you have better credit, or your house is worth a lot more, this isn't a problem. But nobody really knows what job they'll have in the next five years, especially in this economy. And owning a home is expensive, so it's not very likely you'll do a lot to improve your credit score.

These ARM loans are almost always a bad deal. They are designed to help real estate agents sell more home, and banks to make more loans. But they aren't designed to really help customers. The initial five years of a low mortgage payment is enough time for you to forget your real estate agent, and long enough for your bank to sell your mortgage to somebody else. By the time you've found that you're in over your head, everybody has split, and you're left holding the bag.

The moral of the story? Only get fixed rate loan. If you can't afford to buy the house you want with the loan you can afford, hold off. Improve your credit, save some money, and learn some new skills so you can make more income.