Record high home prices and escalating mortgage rates are combining forces to put home ownership out of reach for some Americans.
In fact, May of this year was the most expensive month since 2006 to buy a home, according to the National Association of Realtors’ housing affordability index. The affordability index, which takes into account median existing home prices, median family incomes and average mortgage rates, was close to its lowest level since July 1990.
This has caused some buyers to give up, while others sought alternatives to a conventional 30-year-mortgage to finance their home purchases.
Some homebuyers are turning to Adjustable-Rate Mortgages, called ARMs, to finance purchases at a lower initial rate. While these introductory “teaser” rates may be appealing, an adjustable-rate mortgage may cost you more in the long run so it is important to read the fine print and consult with a trusted advisor.
Today, we will look closely at Adjustable-Rate Mortgages and I will explain how they work and the reasons they might make sense for some people, but only with careful analysis and planning.
Hi, I’m John Gigliello, Certified Financial Planner with the Albany Financial Group and you’re listening to Invest in Knowledge, a podcast about all things financial. After a life-altering health issue at 39, my calling in life became clear: To share my knowledge of personal finance with PEOPLE who are looking to make smart and responsible choices with their money. Only through education, action and accountability can YOU build the confidence and security YOU need to live a SATISFYING life.
We are talking about adjustable-rate mortgages today because they are gaining in popularity right now, but they can be complex and require careful analysis.
A house is the biggest purchase most people make in their lifetime, and one of the most important financial decisions you can make, so it is important to get it right.