The Truth About Changing Rates

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In the housing industry, there’s always a lot of talk about changing interest rates. But if you focus too much on the rates, you might miss out on the long-term value of homeownership.

Rates change, housing prices go through highs and lows, and the markets will fluctuate. But the value of homeownership is more consistent. Even as rates go up and down through the years, owning a home will generally appreciate in value over the long term.

What a lot of people don’t understand is the difference between paying rent versus paying a mortgage. When you pay your rent, that money goes straight into your landlord’s pocket. All your rent money does is give you a place to stay for the next month. But as you pay off your mortgage, you build equity in your home.

Building home equity is like a savings account for the future. For the long term, as you pay off your mortgage, you will likely build home equity, which gives you the option to tap into your equity in the future.

There are many different ways that you can use your home equity. A lot of people tap into their equity to pay off credit card debt. But you can also use this money for travel, home renovations, even life events such as helping to pay for your kid’s wedding.

Besides the long-term financial value of homeownership, there’s also the emotional value to consider. As you reach a certain point in your life, you start to realize how exhausting it can be moving from one rental to another.

Transitioning into a stable living situation allows you to put down roots for the future. Owning a home means having a space to make long-lasting memories that you and your family will share for years to come.



The bottom line

Rates change all the time. In the grand scheme of things, however, rates don’t really matter as much. What it really comes down to is long-term value, and what that value means for your future.

When choosing the best mortgage options for you, think about the overall value. If you focus too much on rates, you might overlook other factors (such as extra fees). Also, make sure to get a second opinion when it comes to your mortgage options.

You should always talk to a professional about how to make the best financial decisions for your unique situation. And while changing rates do play a role in these decisions, they don’t paint a full picture of what it really means to own a home.

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Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

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