Fixed-rate mortgages pros and cons

When inflation rises, central banks often raise interest rates to combat it. If you have a fixed-rate mortgage, your rate and payment are locked in and will not increase, even if new mortgage rates soar. You are effectively shielded from the impact of rising interest rates in the broader economy.

Yes, but only if the loan was used to “buy, build, or substantially improve” the home that secures the loan. The debt must also fall within the $750,000 (or $1 million) total mortgage limit. You cannot deduct interest on a home equity loan used for personal expenses, such as paying off credit card debt or funding a vacation.

Your DTI ratio is a key metric calculated by dividing your total monthly debt payments by your gross monthly income. It comes in two forms:
Front-End Ratio: Housing costs (PITI) / Monthly Income.
Back-End Ratio: All monthly debt payments (PITI + car loans, credit cards, etc.) / Monthly Income.
Lenders use this to gauge if you can comfortably manage your mortgage payments alongside your other debts. A lower DTI is always better.

Recasting is an excellent strategy in specific situations, such as:
You receive a large sum of money (e.g., inheritance, bonus, or sale of an asset).
You want to lower your monthly obligations but have a low interest rate you don’t want to lose by refinancing.
You want a simple, low-cost way to adjust your mortgage after a significant principal paydown.