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style. One of its premises is that no single mortgage format works well for all borrowers. Everyone has different needs and, what's more, constantly changing needs. Therefore, to make an informed decision you must be acquainted with a variety of possibilities—all of which are covered in this book. Read it!
"I do want to offer an opinion about the type of mort-gage you should select, though. Nobody, and I mean no-body, can accurately predict the future course of short-term and long-term interest rates. There are people who are paid hundreds of thousands of dollars a year to consistently forecast interest rates incorrectly. Just think what they'd be making if they were consistently right! Because no one can predict the future with certainty, it is difficult to decide between a fixed-rate mortgage and an adjustable-rate mortgage, which fluctuates along with prevailing interest rates. 'What if I take an adjustable-rate mortgage and rates rise to fourteen percent? I'll be in big trouble.' 'What if I take a fixed-rate mortgage and rates fall three points? I will have wasted all that money.' It's a tough call.
"But James and I do agree on this point: For the ma-
jority of us, a fixed-rate mortgage is the way to go. If you know you can afford to make the payments, you should never be in trouble. Basically, you're fixing your costs and, in most cases, you can be sure your income will be rising. Sure, sometimes rates will go down and you'll regret your decision. Even then, though, you can often refinance. Yes, there are associated costs and sometimes penalties, but if rates fall by two percent or more it's often a good move. And remember, sometimes rates will go up and you'll be thankful that you're protected. It comes down to risk versus reward. The risk is that rates may fall and you'll be paying