The
injustice
The most basic scenario to describe the importance of financial literacy is buying a home.
64.8% of Americans own their own homes.
It is considered one of the most importance purchase a person can make in their lives.
When buying a home the two most basic mortgages are Armed Rates and Fixed Rates
ARM RATES
An adjustable-rate that will fluctuate over time. In the first 5 years there will be a low rate on the mortgage and when a payment is made every month, a little bit of the original amount is paid of and the interest payment goes to the banks. After these five years of a low rate, the mortgage rate increased.
FIXED RATES
Most people take out a loan and has a fixed rate attached to it (over the next x years you know how much you will have to pay each month)
Each mortgage has different benefits, but banks do not always give all the background information on each loan before a buyer signs the papers.
This can lead to predatory loaning a practice where loaners/ bankers take advantage of a person's lack of education to make a sale or deal that would make the bank more money in the long term.
Often homeowners are not given all the information they need, putting them at risk of losing money on their home.
