If you’re raring to buy a home, chances are you’ll need a mortgage. But which kind of mortgage should you get?

Home loans aren’t one size fits all, but come in a variety of forms to suit home buyers in different circumstances. One good place to start figuring out your options is a mortgage calculator, where you can plug in various home prices and and have this sum broken down into monthly payments. Still, in addition to a home’s price, you should carefully consider the type of loan you get.

Two of the main types of mortgages home buyers consider getting are a fixed-rate mortgage and an adjustable-rate mortgage, or ARM.

So what’s the difference between these two types of home loans? In a nutshell, a fixed-rate mortgage has an interest rate that stays the same over the life of the loan. An ARM, by contrast, has an interest rate that changes over time.

Before you seek out mortgage pre-approval, let’s break down the pros and cons of each loan so you can decide which one is right for you.

ARM vs. Fixed-Rate Mortgage: Which Home Loan Is Better for You?

Fixed-rate mortgage

According to Wells Fargo Home Mortgage Area branch manager Chris Jurilla, the majority of homeowners tend to prefer fixed-rate mortgages. And for good reason: A fixed interest rate means your mortgage payments remain steady over the life of your loan.

“Fixed-rate mortgages provide more long-term stability,” Jurilla says. “And with rates still low, borrowers prefer the security of not risking a rate increase or adjustment if the market were to turn.”

If you’re a home buyer with steady employment who wants to put down roots in a community, a fixed-rate mortgage might appeal to you. This kind of loan is also advantageous to people approaching retirement, because the fixed payments make it easier to plan their finances.

The pros of a fixed-rate mortgage:

  • Predictability: The interest rate doesn’t change for the life of the loan, giving home buyers peace of mind.
  • Fixed costs: You can budget more easily as the rate and payments remain constant.
  • Straightforward numbers: The math involved with figuring out your loan is way easier than for an ARM.
  • Stability: This predictable loan is more appealing for the risk-averse.

And the cons:

  • You’re locked in: You won’t be able to take advantage of falling interest rates without refinancing.
  • Your borrowing has a ceiling: You may not qualify for as much house as you would like, because those mortgage payments are typically higher.

Adjustable-rate mortgage

An ARM starts out at a fixed, predetermined interest rate, likely lower than what you would get with a comparable fixed-rate mortgage. However, the rate adjusts after a specified initial period—usually three, five, seven, or 10 years—based on market indexes. If those indexes go up, your payment will go up, too (sometimes way up).

If you’re a more mobile or first-time home buyer who wants to keep your long-term options open, an ARM’s low introductory interest rate is certainly tempting. As long as you’re ready to move on before the introductory period ends, you’ll benefit from the advantage of making lower payments while you’re living in the home. And because your lender will be qualifying you based on a lower monthly payment, you could qualify for a more expensive house than you would with a fixed-rate mortgage.

“ARMs are best suited for investors or home buyers who have short-term ownership goals in mind,” says Jurilla. “Most opt for an ARM if they don’t foresee themselves staying in the home for an extended period of time. There are some who use it as a stepping-stone loan, a short-term solution with a lower monthly payment.”

The pros of an ARM:

  • Low initial rate: There are lower rates and payments early in the loan term than in a traditional fixed-rate mortgage.
  • You can borrow more: You have a chance of being approved for a more expensive house because your lender will look at the lower payment when qualifying you for the loan.
  • Falling rates: Some ARMs allow you to automatically take advantage of lower rates without the hassle and expense of refinancing.

And the cons:

  • Unpredictable rates: After the introductory term, payments and rates can rise substantially. However, if market indexes go down, that doesn’t necessarily mean your mortgage payments will, too. Be sure to read the fine print on your mortgage.
  • Complicated mortgage agreements: You’ll need to understand the complex terms of your agreement, such as margins, caps, and adjustment indexes.
  • Math and more math: You have to put in significantly more work to figure out the math of an ARM and how it could potentially affect your budget.
  • Prepayment penalty: You can’t pay off your loan for the number of years specified in your agreement. So if interest rates jump while you still have a prepayment penalty in place, you can’t refinance or sell your home without incurring a huge cost.

Choose the loan that’s best for you

The 30-year fixed-rate mortgage is the most popular in America, but that doesn’t mean it’s perfect for you. An adjustable-rate mortgage can work well for many young or financially savvy homeowners. Still, many borrowers would rather deal with the stability of a fixed rate than the fluctuating payments of an ARM.

So, who wins? Either mortgage can—it all depends on your individual circumstances. Talk to a mortgage lender or mortgage broker to learn more about which one is right for you. And be sure you understand each loan’s terms, and always compare rates before signing onto a mortgage.


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I’ve been hearing that the housing market is slowing down and prices may even start falling. Should I put my home search on hold to get a better deal down the road?

The news has been filled with stories about how the housing market is finally cooling—after more than two years of unprecedented price growth and wild bidding wars. More homes are going up for sale in many markets. Buyers no longer need to waive every contingency imaginable—and promise to name their first born after the seller—to snag a home of their own.

Some prospective buyers are starting to believe that falling prices might even be on the horizon if they just wait out this crazy market.

Is putting the home search on hold a money-saving move or just wishful thinking? That remains to be seen. No one wants to buy at the top of the market, but it’s not clear yet whether the market has peaked—or if record-high home prices and fast-rising mortgage interest rates will continue ratcheting up even further.

Now, as the nation appears to be on the precipice of what could be another recession, inflation is soaring, and financial markets are stuck in a mostly downward-moving roller-coaster ride, it seems like something has to give.

So is the time right to dive into homebuying, while you still can? Or should you go into a holding pattern? As it turns out, there are compelling arguments on each side.

On the House: Should First-Time Homebuyers Press the Pause Button?

Let’s break it down into what we know: There are more homes going up for sale. Sellers have raced to plant “For Sale” signs in their front yards while they can still fetch a good price and builders have put up more new residences. That’s great news for homebuyers.

The number of sellers forced to cut prices on their properties doubled in June compared with the same month a year ago.

We also know that there’s less competition from buyers. Fewer buyers are able to qualify for mortgages as a result of the higher interest rates. Others worried about high prices and the prospect of another recession are dropping out of the market. That means fewer bidding wars. Buyers don’t have to offer so much over the asking price—and might even be able to get a home for less than the asking price. And they don’t need to waive as many contingencies.

Still, many real estate experts are advising buyers—especially first-timers—to wait it out this period. Why? Because the toxic combo of high prices and rates has pushed homeownership out of financial reach for many younger or less well-off buyers, or would require them to dangerously stretch their budgets.

It’s likely that those who wait until the fall or next spring are likely to encounter even more homes for sale, additional price cuts, and an increasingly buyer-friendly market.

We also know that mortgage rates typically fall during recessions. So if a downturn does materialize, buyers who remain employed will likely get a little bit of a financial break.

Economists don’t expect widespread unemployment in a downturn that would lead to large numbers of homeowners not being able to pay their mortgages—as happened in the housing crash. Lenders haven’t made nearly as many risky loans. And there are still too many folks who want to become homeowners and not enough residences to go around.

So while prices might go flat, or even dip a little in certain parts of the country where they shot up the most, they’re not expected to fall significantly.

Why first-time homebuyers might not want to wait

While it’s true that what goes up must come down—there’s no telling just when that will be. It’s not easy to time the market.

Some real estate experts are predicting that home prices will just continue to rise. We know there are still far more investors and people out there who would like to become homeowners than there are properties available for them. That’s expected to keep prices high.

Mortgage rates are another unknown. Mounting recession fears could keep them in check. However, the U.S. Federal Reserve is likely to give its own interest rates another steep hike this month to rein in inflation, which stubbornly refuses to fall. When the Fed’s rates rise, mortgage rates typically follow suit.

Higher rates would make homeownership even more expensive than it is today. That could price many aspiring homeowners, especially those who don’t have the proceeds from the sale of a previous home to help finance the next purchase, right out of the market. Or first-time and other buyers might have to look at cheaper homes, such as fixer-uppers and smaller properties without all of the features they had hoped for in less desirable locations.

What’s a first-time homebuyer to do?

Most so-called experts will admit they don’t have the best track record of predicting what the economy or housing market will do. Few economists anticipated that home prices would surge more than 40% in just over two years during a global pandemic. Even fewer called the housing bubble of the mid-2000s that plunged the nation into a painful recession.

My best advice is to be vigilant about what’s happening in the housing market, as well as the broader economy. Look for clues on where it all might be heading. And don’t be afraid to negotiate with home sellers as well as mortgage lenders.

If rates fall one day, be ready to pounce immediately. Shop around for the best rates, consider paying points, which lower rates, and be prepared to haggle. You want to lock in the lowest rate you can find, yet maintain some flexibility so that if they fall even further, your lender will honor the lower rate.

The same goes for homebuying—be ready to move in on a good opportunity. Sellers are likely to be receiving fewer offers than they were just a few months ago. That means buyers might not have to offer as much over the asking price. They might not need to waive home inspections and might be able to negotiate repairs and other problems with the sellers. This can help to lower their total bills or even result in a smaller sale price. Buyers who hold on to their appraisal contingency also can save themselves some cash if the home isn’t valued as much as their initial offer. This gives them the opportunity to renegotiate a better price.

Buyers might also not need to put as much down for sellers to seriously consider their bids. This allows them to do the math and see if it makes more financial sense for them to put in a lower down payment and use the rest of the money to buy down their mortgage rates.

Watch the markets. Keep track of housing trends and economic factors. You’ll get a clearer idea of when the time is right for you.


For this and related articles, visit Realtor.com

It’s a slow Sunday morning. You’ve just brewed your Nespresso and popped open your laptop to check out the latest home listings before you hit the road for a day of open houses.

You’re DIYing this real estate thing, and you think you’re doing pretty well—after all, any info you might need is at your fingertips online, right? That and your own sterling judgment.

Oh, dear home buyer (or seller!)—we know you can do it on your own. But you really, really shouldn’t. This is likely the biggest financial decision of your entire life, and you need a Realtor® if you want to do it right. Here’s why.

6 Reasons You Should Never Buy or Sell a Home Without an Agent

1. They have the right expertise

Want to check the MLS for a 4B/2B with an EIK and a W/DReal estate has its own language, full of acronyms and semi-arcane jargon, and your Realtor is trained to speak that language fluently.

Plus, buying or selling a home usually requires dozens of forms, reports, disclosures, and other technical documents. Realtors have the expertise to help you prepare a killer deal—while avoiding delays or costly mistakes that can seriously mess you up.

2. They have turbocharged searching power

The Internet is awesome. You can find almost anything—anything! And with online real estate listing sites such as yours truly, you can find up-to-date home listings on your own, any time you want. But guess what? Realtors have access to even more listings. Sometimes properties are available but not actively advertised. A Realtor can help you find those hidden gems.

Plus, a good local Realtor is going to know the search area way better than you ever could. Have your eye on a particular neighborhood, but it’s just out of your price range? Your Realtor is equipped to know the ins and outs of every neighborhood, so she can direct you toward a home in your price range that you may have overlooked.

3. They have bullish negotiating chops

Any time you buy or sell a home, you’re going to encounter negotiations—and as today’s housing market heats up, those negotiations are more likely than ever to get a little heated.

You can expect lots of competition, cutthroat tactics, all-cash offers, and bidding wars. Don’t you want a savvy and professional negotiator on your side to seal the best deal for you?

And it’s not just about how much money you end up spending or netting. A Realtor will help draw up a purchase agreement that allows enough time for inspections, contingencies, and anything else that’s crucial to your particular needs.

4. They’re connected to everyone

Realtors might not know everything, but they make it their mission to know just about everyone who can possibly help in the process of buying or selling a home. Mortgage brokers, real estate attorneys, home inspectors, home stagers, interior designers—the list goes on—and they’re all in your Realtor’s network. Use them.

5. They adhere to a strict code of ethics

Not every real estate agent is a Realtor, who is a licensed real estate salesperson who belongs to the National Association of Realtors®, the largest trade group in the country.

What difference does it make? Realtors are held to a higher ethical standard than licensed agents and must adhere to a Code of Ethics.

6. They’re your sage parent/data analyst/therapist—all rolled into one

The thing about Realtors: They wear a lot of different hats. Sure, they’re salespeople, but they actually do a whole heck of a lot to earn their commission. They’re constantly driving around, checking out listings for you. They spend their own money on marketing your home (if you’re selling). They’re researching comps to make sure you’re getting the best deal.

And, of course, they’re working for you at nearly all hours of the day and night—whether you need more info on a home or just someone to talk to in order to feel at ease with the offer you just put in. This is the biggest financial (and possibly emotional) decision of your life, and guiding you through it isn’t a responsibility Realtors take lightly.


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OK, let’s get this straight: Craftsman isn’t just the brand name of the tools out in the garage, and Cape Cod isn’t just a fabulous vacation spot. We understand your confusion and feel your pain. There’s so much architecture lingo and name-dropping in listings, how’s a layman supposed to know what’s what? Oh look, realtor.com® to the rescue! Again! In the first of our Learning the Lingo series, we’ve compiled a guide to the most popular architecture styles to help you identify what you want in your house hunt.

Cape Cod

Cape Cod home
Cape Cod with steep roof and second-story dormers

(Pop Chart Lab)

OK, it’s no spoiler that these homes are named after the quintessential New England vacation destination—Cape Cod in Massachusetts—where they first became prevalent. Much like the Puritans of old, Cape Cods are modest and economical. This makes sense, since Colonial settlers in the Northeast modeled their newly built homes after British cottages. These homes have steep roofs that reach the first floor (to quickly shed rain and snow) and second-story dormers (a window that projects vertically from a sloping roof). Fun fact: Original Capes used unfinished cedar shingles, which are ideal to weather the stormy and unforgiving East Coast winters.


Colonial home
Colonial with symmetrical features and entry door in the middle

(Pop Chart Lab)

A Colonial is an OCD fever dream come true: It’s symmetrical and features an entry door in the middle of the front of the home with two windows on either side; there are five windows on the second floor, with one directly above the entry door. Colonials, which originally rose in popularity in the oh-so-uniform 1700s, are still common around the U.S. They’re usually built of wood or brick, which are perfectly suited to the simple, clean, and boxy style. If you see a hint of ancient Greece and Rome in the style, you aren’t wrong. Looking for distinctive flourishes? Keep looking.


Queen Anne-style Victorians
Queen Anne–style Victorians: aggressive whimsy or detail-packed charm?

(Pop Chart Lab)

Did you spend hours with your dollhouse as a kid? Were your parents, teachers, and various health care providers worried? Then the detail-packed Victorian style will probably look familiar. Key features include a complicated, asymmetrical shape with wings and bays in various directions; elaborate trim; shingles or patterned masonry; steep rooflines; and a large, wraparound porch. They are often painted in bright, complementary colors to highlight the painstaking details. Some people are put off by their aggressive whimsy, but plenty consider them perfect houses to grow old in and sip lemonade on the porch.


Tudor home with multi-façade gables
Tudor with multifaçade gables

(Pop Chart Lab)

Love yourself some neutrals or Jonathan Rhys Meyers? Then you’re probably drawn to Tudors, which are built of brick or stone on the first level and complementary stucco and timbering on the second—all of which is inspired by the medieval architecture of Tudor England in the early 16th century. These babies are made to withstand the elements, with deeply pitched roofs and detailed, covered entryways, which is why you’ll see more of them in the chilly northeast.


Ranch house with cross-hipped roof
Ranch with cross-hipped roof

(Pop Chart Lab)

Blame (or credit, depending on how you feel about this style) the rise of the automobile, not cowboys, for ranch houses. Cars made it possible for families to buy large lots of land outside traditional metropolitan centers—aka “the suburbs”—so people built spread-out ranch houses to take advantage of these new spaces. These homes are one story and often have an L- or U-shaped floor plan surrounding a patio, sliding glass doors, and a carport or garage. Quite possibly the best-known symbol of American housing, the ranch can conjure up images both good and evil, but no doubt you will see lots of them.


Bungalow/craftsman style home
Bungalow/Craftsman with handcrafted details

(Pop Chart Lab)

These adorable one-story homes are characterized by their low pitched roof and large front porch. Also called Craftsmans, they rose in popularity in the early 1900s during the arts and crafts period and were revered for their—you guessed it—handcrafted details: hand-cut wood, iron and copper work, and masonry. Bungalows hit their peak during this time and became so popular in the early part of the past century, that you could order a complete kit from Sears.


Spanish-style home
Spanish-style home designed to withstand heat

(Pop Chart Lab)

You find a lot of these homes in the South or Southwest (Hollywood is full of them). One reason for their popularity: They’re built from the ground up to take the heat. Clay tile roofs keep the home cool during the hot summer months and extend beyond the walls to provide extra shade, while extensive outdoor living areas, columns, and arched windows and openings take advantage of the breeze.

Mid-Century Modern

Mid-century modern home
Mid-Century Modern with sharp angles and void of ornamentation

(Pop Chart Lab)

If you squint just enough, Mid-Century Modern homes (sometimes just called “modern,” though the century in question is the 20th) can look a bit like your grade-schooler’s art project. Full of sharp angles and void of ornamentation, these contemporary homes offer flat or shallow-pitched roofs and loads of glass. They often incorporate the surrounding outdoor space via decks and balconies. While they started sprouting up in the 1950s, the timeless aesthetic has turned these sleek, stripped-down houses into classics.

French Country

French country style house
French Country home with symmetrical shape and balanced windows

(Pop Chart Lab)

Is that a Nicholas Sparks movie we feel coming on? No, it’s just the French Country style that’s inspired by the rustic manors that dotted the fields of northern and southern France during the reign of Louis XIV in the mid-1600s. The Revival style popped up in the 1920s and 1960s. The homes have a square, symmetrical shape with windows (often double windows and/or balconies) balanced on either side of the entrance and a steep hipped roof. They are most often made of stone, stucco, and brick.


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For most home shoppers, any mention of roof damage is enough to send them sprinting in the opposite direction. Buyers who are not in the market for a fixer-upper are typically trying to nab a house in the best possible condition, and roof damage can be seriously costly to repair.

But should a faulty roof scare you off, or does it present an opportunity to negotiate the price of the home? Consider these factors before making a decision.

Should You Buy a House With Roof Damage? The Surprising Benefits—and Challenges

How bad is the damage?

The extent of the roofing damage is one factor that should help sway your decision.

“If some or all of the shingles have been blown off during a one-time event like a tornado, hurricane, or tree collapse because of a storm, then correcting any structural damage and replacing the shingles should suffice,” says Frank Lesh, former president and executive director of the American Society of Home Inspectors.

The problem with roofing damage, however, is that it can be more extensive than it appears.

“Be aware that a bad roof could lead to other issues such as ceiling drywall, insulation, or even structural replacement,” says Shawn Breyer, owner of Breyer Home Buyers in Atlanta. And these additional issues can add to the cost of fixing the roof.

Are you getting an FHA loan?

Buyers who plan on using a Federal Housing Administration loan to finance the house can end up putting down as little as 3.5%. But to be approved for the FHA loan, the property must be in livable and insurable condition, and the buyer must have secured property insurance before closing.

To get property insurance, the insurance company will require a four-point inspection, which covers electrical, plumbing, HVAC, and the roof’s condition and life expectancy, according to Juan Rojas, licensed real estate broker at JPR International Real Estate in Miami.

“Typically, if the roof doesn’t have at least three years of life expectancy, an insurance company won’t be able to insure it,” he says.

Therefore, if you’re planning on getting an FHA loan, trying to buy a home with roof damage might be more trouble than it’s worth.

What if it’s just an old roof?

Perhaps there’s no proven damage to the roof; maybe it’s just really old, like, 20 years old. The life span of your roof is determined by the material it’s made of and the weather conditions in your area. Slate, copper, and tile roofs can last 50 years or longer; wood shake roofs last about 30 years; fiber cement shingles last 25 years; and asphalt shingle roofs last about 20 years, according to the National Association of Home Builders.

Home buyers shouldn’t necessarily shy away from a home with an older roof, Lesh says.

“It would depend on the quality of the workmanship and materials, and whether any signs of abnormal wear are visible,” he says. “For example, a 20-year-old undamaged, clay tile roof in the southwestern United States is more likely to last longer than a brand-new composite shingle roof in the same area.”

Should you buy a home with roof damage?

Ultimately the decision is yours; however, most of the experts we spoke to believe that problems with a roof should not deter you from purchasing a house—as long as there are stipulations.

“As long as the damage has been or will be repaired, there should be no problem buying a house with a roof that has been damaged,” says Lesh.

Maya Madison, a real estate agent at Keller Williams Realty in Metairie, LA, believes you should absolutely consider buying a house with roof problems.

“During the inspection period, get a quote from a licensed contractor to repair or replace” the roof, she says. “Either the seller will agree to fix it before the act of sale, or take the amount off the purchase price.”

And if you don’t agree with the seller’s decision, Madison says you can cancel the contract during the inspection period.

However, if you decide to proceed with the purchase, Breyer warns against letting the sellers make the repairs. He advises buyers to get their own quotes and then negotiate the price down based on the amount it will cost to repair or replace the roof.

“The sellers’ goal would be to save money, meaning that they are going to hire the cheapest contractor, and you might end up with a roof repair that is lacking in quality,” Breyer says.


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