With mortgage interest rates hovering around 7%, more than double since the start of 2022, prospective homeowners are likely asking themselves how much home can they afford and what’s the best way to finance it.

“Housing markets continue to feel the direct impact of higher mortgage rates,” George Ratiu, manager of economic research for Realtor.com, recently wrote. “With incomes lagging behind inflation, homebuyers’ ability to finance a purchase has been slashed by mortgage rates which surged from 3.1% at the start of 2022 to almost 7%.”

Along with the amount financed and the interest rate, the term of the mortgage directly affects the monthly mortgage payment.

The most common options and fixed-rate and adjustable rate mortgages.  Here’s what buyers need to know about both.

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