Mortgage Knowledge
10 Things Every Buyer Should Know
Buying a home involves concepts most people never learn in school — rate caps, PMI rules, tax deductions, selling costs. Each one of these can save or cost you thousands of dollars.
How it works: You’ll see 10 real-world scenarios with real numbers. Pick the answer you think is right. After each one, we explain the concept and why it matters — whether you got it right or not.
What you’ll learn: How ARM rate caps protect you, when PMI drops off, why the mortgage tax deduction is smaller than you think, how selling costs eat into your profit, and more.
Takes about 5 minutes. Every answer links to a deeper article if you want to learn more.
ARM Rate Caps
Adjustable-rate mortgages have built-in caps that limit how much your rate can change at each adjustment period, protecting you from sudden spikes.
Your 5/1 ARM starts at 5.5%. Your periodic cap is 2% and lifetime cap is 5%. If market rates jump to 11% at your first reset, what rate do you pay?
This is for educational purposes only. Tax rules, lending guidelines, and market conditions change — verify current information with qualified professionals.