1. Understand mortgages
Do you know which type of mortgage is best for your financial situation? Choosing wrong can cost you.
In addition to the mortgage interest rate itself, you must also consider whether you’re better off with a rate that is adjustable or fixed. Adjustable-rate mortgages are more of a gamble, especially as the Federal Reserve has continued to increase the federal funds rate, helping nudge mortgage rates in the same direction.
You will also have to decide on the mortgage term, such as 15 years or 30 years. The common 30-year mortgage gives you more time to pay off your mortgage and means a smaller monthly mortgage payment. But it also means you will pay far more in interest over the life of the loan.
As we explain in “The 6 Worst Mortgage Mistakes You Can Make“:
“If you’re not comfortable with the loan terms or don’t understand them, it’s better to walk away than to make an expensive and potentially life-altering mistake.”