Most have yearly caps on increases and a ceiling on how high the rate climbs. But if rates climb quickly, so will your payments. The longer the loan, the lower the monthly payment. But total interest is much higher. Each point is an up-front cost equal to 1 percent of the loan.
Points are interest paid in advance, and they can lower monthly payments.
But if your credit is less than perfect, you'll probably have to pay points simply to get the loan. Loan shopping often starts with mainstream mortgages from banks, credit unions and brokers. Like all mortgages, they use your home as collateral and the interest on them is deductible. Referred to as A loans from A lenders, they have the lowest interest. Because you probably have a mortgage on your home, any home improvement mortgage really is a second mortgage.