Source: Maine Public —
ARI SHAPIRO, HOST:
With mortgage rates up sharply, a lot more homebuyers are turning to adjustable-rate loans. These can be more affordable – at least at first – but they come with a big risk – that your mortgage payment might go up a lot in the future. So how do you know if the risk is worth it? NPR’s Chris Arnold explains.
CHRIS ARNOLD, BYLINE: Katrina Wooten is trying to buy a house near Gainesville, Fla.
KATRINA WOOTEN: We hate where we’re living right now. It’s a trailer. It’s falling apart.
ARNOLD: Wooten has three kids, and these days, she has a good job as a nurse with the VA. So she saved up a down payment and signed a contract to buy a new home for about $375,000. The whole family was excited.
WOOTEN: So excited, especially my 14-year-old. You know, he’s going to be out of my house probably in a few years, and he’s never really had, like, a nice house to live in.
ARNOLD: But the house won’t be finished getting built for a few months, and she hasn’t locked in an interest rate on a mortgage. So if she were to get a mortgage today, the monthly payments would be hundreds of dollars higher than she budgeted for because rates have risen so much so quickly.
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