With all of the different mortgage products available these days, as well as the problems we are seeing within certain sectors of the industry; many people can find themselves very confused and overwhelmed if they need to take out a mortgage or refinance right now.

The truth is, there is not one “perfect mortgage” out there that suits every single borrower perfectly.

Potential homeowners (or current homeowners looking to refinance), need to take out a mortgage that works for their specific financial picture and situation.

A recent article on bankrate.com by Elizabeth Razzi, “What type of mortgage is best for you?” takes a look at some different mortgage products that are available in today’s market and which ones will be best for your specific situation depending on what stage you are at in life.

“Mortgage lenders offer many features and restrictions that can be added to a variety of mortgage programs, but the following eight mortgage loans are the basic types you will encounter. No single loan is best for all circumstances, but here you'll see what specific loan types work better than others depending on individual circumstances and lifestyles.”

The first loan is a 30-year fixed-rate loan that is perfect if you are going to stay in your home for the next three decades and never move or refinance. Since this is not the case for most people, we will move on to the next type of mortgage.

If you are either a recent graduate or have a good job but have income that is not consistent from month to month you should consider some sort of adjustable-rate mortgage (ARM). These types of loans come in many shapes and sizes but typically have a fixed rate for a certain amount of time but can then adjust according to current market standards.

The option ARM is most popular for those with varying incomes such as people who work on commission. “Each month you have a choice of payments: The full amount needed to pay off principal and interest as scheduled, an amount that covers only the interest owed that month, or an even smaller amount that doesn't even cover interest owed. In a month in which your earnings are lean, you might choose to make one of the lower payments, even though that actually adds to the amount of debt you must eventually pay back.”

There are also many other types of ARMs available on the market that all have different terms and conditions.

It is essential though, as with any type of loan that the borrower understands it carefully and fully before signing into anything.

Interest only loans are a sophisticated type of loan product that is bets for savvy homeowners or seasoned investors. “While these loans can be risky for novice borrowers or those stretching to afford a home, they can be a smart tool for financially sophisticated borrowers who already have assets built up. Monthly payments are low because you're not repaying principal, so you can afford a larger loan.”

Some other types of loans that are on the market are VA loans, which are good for any person who is on active military duty or a veteran.