Charles Forelle

speaker

205 appearances 2 recordings 1 series first heard Jan 2022 last heard Oct 2022

Charles Forelle’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · From IRA to HSA: Decoding Personal Finance's Alphabet Soup · 18 Jan 2022 podcast

There are two primary kinds of mortgages in the United States.

One is a fixed rate mortgage, and one is an adjustable rate mortgage.

And those are chiefly your two choices.

So you can take out a mortgage where you're

your principal and interest payments are fixed over the life of the loan.

So a 30-year mortgage or a 15-year mortgage, and every month you pay the same amount of money until the mortgage is completely paid off.

And the adjustable rate mortgage is a mortgage where the amount that you pay depends on where interest rates are, and the amount of interest will change depending on what prevailing interest rates are and what exactly the index is that they compare to in order to determine what your rate is.

So an arm, your interest payments will move

And in a fixed rate, they won't.

Why would you take on an arm instead of a fixed rate loan?

The reason that you would take on an arm is that the interest rates are typically lower.

So you will save some interest, but you also take on the risk that your payment will go up.

So a HELOC stands for a home equity line of credit.

And you can think of a HELOC as basically a second mortgage.

And so if you have purchased your house and your house has increased in value, let's say, or when you purchase the house, you put a bunch of money down.

But more typically, you've purchased the house and the house has increased in value.

You've paid off some of the mortgage.

The equity in your house, which is the difference between the value of the house minus what you owe on the mortgage, so that gap, if that gap is large enough, a bank or another institution will lend you money against that gap.

equity.

So they take on a bunch of different forms, but a HELOC is a line of credit.

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