Are you ready to buy a house? How much can you afford? Answering that second question may not be so easy. Before you snap up that seemingly great buy on a home, learn how to analyze what “affordability” means. You’ll need to consider various factors ranging from debt-to-income (DTI) ratio to mortgage rates.
Compound interest investors and mortgage borrowers have something in common: They are both “rate hunters” who keep an eye on the market for conditions they can take advantage of. Homeowners who carry a mortgage on their properties will look for signs of lower interest rates so that they can apply for refinancing; the opposite takes place among compound interest investors who look for financial instruments that pay higher rates.