Unless you have enough cash to buy a house outright, most people will end up having to finance the purchase of their house. There are two basic kinds of mortgages -- fixed rate mortgages and adjustable rate mortgages. One must be conservative in getting a loan. The fixed rate mortgage allows you to plan well into the future since the monthly principal and interest payments remain the same. In the adjustable rate mortgage the interest rates may change during the life of the loan. In most cases, this is tied to the prime lending rate. Of course the tax and insurance rates are not predictable in any case. Try to shop for a good home owners insurance policy. Put down sufficient down payment and make additional principal payments whenever possible so the principal can be brought down faster and you can own your home free and clear. This is called accelerated amortization.
Before you go around taking home equity loans to take a dream vacation, or invest the money in a poorly thought-out business proposal, think twice -- there is tremendous peace of mind when you own your home free and clear of any liens or mortgages.
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