When reviewing the type of loan products available, also consider the loan term that would best fit your situation and needs. In general, a loan with a longer term typically has lower payments, but comes with a higher interest rate, resulting in a larger amount of your payment made to interest over the life of the loan. A shorter term offers a lower interest rate, allowing a greater portion of you mortgage payment to be applied to the principal balance, but this option also requires a larger monthly payment commitment.