ARM? Interest only? Conventional? Which mortgage would be best for you?

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Interest-only Mortgage: Many home buyers are opting for mortgages with interest-only payments so they can afford to buy a more expensive home. They have lower monthly payments for five, 10, or 15 years, which makes qualifying easier. They could work if you:

* Need more home than you can afford.

* Live where home values are rising.

* Can make a significant down payment.

* Believe you can afford higher payments when you refinance or when the interest-only period expires.

* Will not stay in the home more than the national average of seven years.

ARM (Adjustable Rate Mortgage): About 28 percent of new mortgages today are ARMs. Federal Reserve Chairman Alan Greenspan has approved of them. They could work if you:

* Can refinance to a conventional mortgage when the low-rate ARM expires.

* Think your income will rise, and you will be able to make higher payments later.

* Know you will move and sell before the initial ARM rate expires.

The 110 Percent Mortgage: Allows you to borrow more than the value of a home. It could work if you:

* Can combine debts into the mortgage and lower interest rates and payments.

* Can afford to make the higher mortgage payment required.

* Will stay in the house for many years.

Conventional Mortgage: Has a consistent interest rate and allows you to pay off the home in 20 or 30 years. The home may be your greatest asset at retirement.