CHAPTER 2 Homeownership Off wnership Offers Stability And Security
Home prices have been increasing for quite some time, but now with rising interest rates and inflation, the market is shifting. So, as a buyer, how can you protect yourself from rising costs for things like food, shelter, entertainment, and other goods and services? The answer is in housing. Buying a home allows you to lock in your monthly mortgage payment for the foreseeable future. That means as other prices rise around you, your monthly housing payment (which is likely your largest recurring expense) will be consistent thanks to your fixed-rate mortgage. This gives you the peace of mind that the bulk of your housing costs is shielded from inflation. The two most common loans are Fixed Rate Loans and Adjustable-Rate Mortgages (ARM), Here's the difference between the two. FIXED-RATE LOAN A fixed-rate loan comes with fixed payments that you make until the end of the loan term, and you don’t have to worry about any surprises along the way. ADJUSTABLE-RATE MORTGAGE An ARM comes with an interest rate that varies according to market conditions and terms. However, most ARM products come with low fixed introductory rates that can vary.
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