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What's a 10/1 ARM? An ARM is a mortgage with an interest rate that can adjust over time in response to changes in the market. The 10/1 ARM has a fixed interest rate for the first decade, followed by annual rate adjustments for the next 20 years. This makes it distinct from traditional fixed-rate mortgages which lock in one rate for the entirety of the loan term. The beauty of the 10/1 ARM lies in the balance it offers: the certainty of a fixed rate for a substantial period and the potential savings from rate adjustments thereafter. How the 10/1 ARM Rate Works: Essentially, the interest rate on a 10/1 ARM is determined by a combination of a fixed margin rate and a variable index rate. The index rate reflects…

Home ownership is part of the American dream and often thought of as a step towards financial stability. For parents, the thought of helping their child set foot on this path can be both appealing and daunting. Here's an in-depth look at why and how parents can provide that initial boost. Why Consider Gifting a Down Payment? In 2022, the National Association of Realtors revealed an intriguing statistic: 22% of first-time homebuyers were aided by gift funds from family or friends. This underscores the trend of families stepping in to aid the next generation in achieving their homeownership dreams. In today's environment, skyrocketing rents, expensive homes, and the looming shadow of student debt make saving for a down payment increasingly challenging for many young people. A down payment gift is…

As we've seen large storms hit both coasts recently, it's a good idea to use the old Boy Scout motto and "be prepared." We are going to review general steps to take to prepare for something we of course never happens. Natural disasters, from hurricanes to earthquakes, wield a devastating power that leaves homeowners and entire communities grappling with significant property damage and high repair costs. The Financial Impact of Natural Disasters on Homes In 2022, the Insurance Information Institute documented nearly $100 billion in insured losses stemming from natural disasters. Here's a breakdown of the data: Severe storms: These accounted for over $29 billion. Earthquakes: About $14.7 billion per year, as per a joint study between the USGS and FEMA. Floods: 15 instances in 2022 led to $3.3 billion…

A balloon mortgage might sound like a fun name, but it's a serious financial commitment. Simply put, it’s a home loan wherein you make low or no monthly payments for a short period, typically five to seven years. Then, you’re expected to make a significant lump sum payment, often called the 'balloon payment', to settle the remaining balance. Due to its unique structure, this mortgage can be both tempting and treacherous. Let's dive into its intricacies. The Mechanics of a Balloon Mortgage So, how does this peculiar mortgage work? For a set duration, you'll make minimal payments that could go solely towards interest or might include a portion of the principal, depending on your loan’s terms. At the end of this period, be ready for the balloon payment – a…