Buying a Home (Mortgages)
01.The Dream of Homeownership
Buying a home is a primary wealth-building strategy in the US. A mortgage is a long-term loan (usually 15 or 30 years) used to purchase real estate. Lenders will evaluate your credit score, employment history (usually requiring 2 years in the US), and debt-to-income ratio.
02.Down Payments & PMI
While 20% down payment is ideal, many government-backed programs (like FHA or conventional loans) allow down payments as low as 3%. If you put down less than 20%, you will have to pay Private Mortgage Insurance (PMI) which adds to your monthly cost.
03.Fixed vs. Adjustable Rates
A fixed-rate mortgage keeps the same interest rate for the entire life of the loan, protecting you from rising rates. Adjustable-rate mortgages (ARMs) start with a lower rate that changes after a set period, which carries more risk.