Understanding Government-Backed Mortgages: Key Insights
Intro
Navigating the world of mortgages can be akin to wandering through a maze with no clear path. For many homebuyers and investors, understanding the various types of mortgages and their implications is essential. Among them, government-backed mortgages stand out as particularly noteworthy due to their unique structure and benefits. This article is designed to provide a robust exploration of these financial instruments, aimed specifically at investors, financial advisors, and analysts who seek a deeper comprehension of their workings.
Government-backed mortgages are a mechanism through which various governmental entities help individuals secure home financing. This support not only helps borrowers achieve home ownership but impacts the broader housing market as well. Understanding this dynamic is crucial in today’s ever-changing real estate landscape.
In the following sections, we will break down the essential terminology related to government-backed mortgages, clarify investment concepts, and highlight critical eligibility criteria. We will also compare these mortgages with traditional options, offering insights into their effectiveness and potential risks. Ultimately, this comprehensive guide aims to equip readers with the knowledge necessary to make informed decisions in the mortgage space.
Understanding Government-Backed Mortgages
Government-backed mortgages are crucial in today's housing landscape, serving as a pivotal lifeline for many looking to buy homes. These mortgages are underwritten by specific government agencies, aiming to reduce the risks of lending for financial institutions. This means less stringent requirements for borrowers and, often, lower costs associated with obtaining a loan. With various programs available tailored to different demographics, like first-time homebuyers and veterans, these mortgages expand access to homeownership where it might not otherwise be feasible.
The importance of understanding these financing options cannot be overstated. With the housing market fluctuating and affordability becoming a growing concern, having insight into government-backed mortgages equips potential buyers with the tools to make informed financial decisions. It allows individuals to weigh the pros and cons of these loans against conventional alternatives, and comprehend how various programs might be utilized to their advantage.
Definition and Overview
Government-backed mortgages are loans that the federal government guarantees, making them a safer bet for lenders. This guarantee enables lenders to offer lower interest rates, reduced down payments, and relaxed credit requirements. Several agencies are involved in this process, including the Federal Housing Administration, the Department of Veterans Affairs, and the United States Department of Agriculture.
In essence, these mortgages are not issued directly by the government but rather through approved financial institutions. The guarantee means that if the borrower defaults, the lender can recover part of their losses. This makes it easier for lenders to take a chance on buyers who might not meet traditional loan qualifications, thus promoting homeownership and stability in the housing market.
Historical Context
The roots of government-backed mortgages trace back to the 1930s during the Great Depression when many families faced foreclosures and home loss. To counter this crisis, the U.S. government initiated various programs aimed at stabilizing the housing market. The Federal Housing Administration was created in 1934 to provide mortgage insurance, helping lenders lend money with more security.
As the decades rolled on, these efforts expanded to encompass veterans and rural residents. The GI Bill, introduced post-World War II, reshaped the landscape of home financing for veterans, allowing them access to no down payment loans. Similarly, the USDA loans emerged to bolster home ownership in less densely populated areas, aligning with the government’s goals of suburban growth and rural development.
Today, these programs continue to evolve, reflecting the changing economic conditions and housing needs of the American public. The ongoing adjustments to eligibility and coverage highlight the complex interactions between government policy and the housing market's demands.
Key Institutions in Government-Backed Mortgages
Understanding the key institutions involved in government-backed mortgages is indispensable for anyone looking to navigate the financial landscape effectively. These organizations play a crucial role in ensuring that home financing is accessible to a broader audience. They provide the frameworks and support that make it possible for countless individuals to secure a home loan, providing the necessary backing that protects lenders while facilitating borrowers' dreams.
Federal Housing Administration (FHA)
The Federal Housing Administration, or FHA, is perhaps the most recognized institution when discussing government-backed mortgages. Established during the Great Depression, the FHA was created to bolster the housing market and offer new opportunities for homeownership. The FHA does not lend money directly to borrowers but instead provides insurance to lenders against default on loans.
This insurance allows lenders to offer lower down payment requirements and competitive interest rates, making homeownership attainable for those who might otherwise struggle to qualify for conventional loans. FHA loans often require as little as 3.5% down, which is significantly less than many traditional options. However, it’s crucial for potential borrowers to understand FHA mortgage insurance costs, which can increase monthly payments and overall loan cost.
Department of Veterans Affairs (VA)
Another important player in the realm of government-backed mortgages is the Department of Veterans Affairs, commonly known as the VA. This institution serves a specific demographic: veterans, active-duty service members, and certain members of the National Guard and Reserves. The VA loan program was designed to offer these individuals and their families access to favorable mortgage terms as a way of honoring their service.
VA loans come with numerous benefits, including the ability for eligible borrowers to secure a mortgage with no down payment, no private mortgage insurance requirements, and competitive interest rates. This is a substantial boon for those who have served, as it eliminates some common barriers found in standard lending practices. Yet, like any financial product, potential borrowers should be aware of funding fees and the implications of these on their overall financial situation.
United States Department of Agriculture (USDA)
The United States Department of Agriculture plays a vital role in government-backed mortgages through its Rural Development program. The USDA aims to enhance the economy and quality of life in rural America by providing home financing options specifically for low to moderate-income buyers residing in eligible rural areas.
USDA loans come with unique perks. For starters, they often require no down payment, making them an attractive choice for homebuyers on a tight budget. However, eligibility is based not only on locations but also on income criteria. Additionally, USDA financing incorporates mortgage insurance, which is typically lower than that of FHA loans, thus presenting an affordable option for those looking to settle in the countryside.
In summary, understanding these institutions—the FHA, VA, and USDA—unlocks the door to numerous options for potential homebuyers. Each of these entities serves distinct populations with specific needs, but they share a common goal: fostering homeownership and contributing positively to the housing market.
Types of Government-Backed Mortgages
Understanding the different types of government-backed mortgages is crucial for anyone looking to make informed decisions in the housing market. Government-backed mortgages come in several flavors, each with its unique set of benefits and eligibility criteria. By diving deep into these various loan types, borrowers can better assess their options and find the best fit for their financial situation.
FHA Loans
FHA loans, sponsored by the Federal Housing Administration, cater primarily to first-time homebuyers or borrowers with less-than-perfect credit. One key advantage of FHA loans is the low down payment requirement, often as little as 3.5%. This is particularly beneficial for individuals who may not have hefty savings but are ready to invest in a home. In addition, FHA loans feature more lenient credit score guidelines compared to conventional loans, making homeownership accessible for more people. However, it’s essential to note that these loans do carry mortgage insurance. This adds to monthly payments, which could affect long-term financial planning.
VA Loans
Designed for veterans, active-duty service members, and certain members of the National Guard and Reserves, VA loans are backed by the Department of Veterans Affairs. One of the most remarkable aspects of VA loans is that they often require zero down payment. This is a vital consideration, especially for those returning from military service who might be looking for a stable housing situation. Moreover, VA loans usually come with competitive interest rates and do not require private mortgage insurance, which can save borrowers a significant amount of money over the loan's lifespan. However, eligibility can be complex, necessitating documentation that verifies service and sometimes a Certificate of Eligibility.
USDA Loans
The United States Department of Agriculture backs USDA loans, aimed at promoting homeownership in rural areas. One significant benefit is that they offer 100% financing, meaning qualifying borrowers can purchase a home without a down payment, making them attractive for potential homeowners in eligible regions. USDA loans also come with lower interest rates and reduced mortgage insurance costs compared to FHA options. However, these loan programs have stringent guidelines regarding income and location, and getting the home you desire might require some flexibility in choosing where you want to live.
Comparison with Conventional Loans
When juxtaposing government-backed mortgages with conventional loans, several highlighted differences emerge.
- Down Payment: Conventional loans typically require higher down payments, often ranging from 5% to 20%. In contrast, government-backed loans can significantly reduce this barrier.
- Credit Requirements: Government loans usually enable those with lower credit scores to qualify, whereas conventional loans can impose stricter credit standards.
- Interest Rates: Often, government-backed mortgages offer competitive interest rates due to the backing by federal entities, while conventional loans may vary significantly based on the lender’s assessment of risk.
Understanding these differences can help potential buyers pivot towards the most beneficial financing option for their unique circumstances. For a more personalized assessment, it could be useful to consult resources like Wikipedia or Britannica for deeper insights.
Eligibility Requirements
Understanding eligibility requirements is crucial for anyone considering government-backed mortgages. These loans, which aim to promote home ownership among a broader segment of society, come with specific prerequisites. Meeting these requirements is the first step to unlock the benefits that government-backed mortgages provide. With varying criteria depending on the type of loan, potential applicants must navigate these waters carefully to ensure they fit the mold.
Credit Scores
Credit scores play an essential role in determining an individual's ability to secure a mortgage. Each government-backed program has its own set of expectations when it comes to these scores.
For instance, FHA loans may allow a score as low as 580 with a minimum down payment, while VA loans often look for scores in the mid-620 range. Still, higher scores can lead to more favorable terms and lower interest rates.
To illustrate, imagine two individuals with different credit scores applying for an FHA loan:
- Person A has a score of 600, leading to a requirement for a 10% down payment.
- Person B, with a score of 700, benefits from only needing to put 3.5% down.
"Good credit is like having a good friend; it opens doors when you need it the most."
While the government-backed mortgage programs aim to help borrowers, having a higher credit score can make a significant difference in the financial burden borrowers will carry over time.
Income Guidelines
Income guidelines serve as a second layer to evaluate eligibility, ensuring that loans are provided to applicants who can reasonably manage the financial obligations. This element is particularly relevant in USDA loans, which are intended for low-to-moderate-income homebuyers in rural regions.
Generally, the total household income must not exceed certain limits, which can vary based on location and family size. The typical cap is often set around 115% of the median income for the area. For example, in some rural towns, this could mean a family of four must earn no more than $80,000 annually to qualify for a USDA loan.
Aside from the traditional limits based on household income, lenders might also look at the debt-to-income ratio, a key factor assessing financial well-being, which ideally should not exceed 43%. Failing to meet this guideline could mean trouble down the road, potentially leading to challenges in loan approval.
Property Requirements
The property’s compliance with specific requirements is yet another vital aspect of the eligibility criteria for government-backed mortgages. The type of property plays a significant role in determining eligibility – whether you aim for a single-family home, a multi-unit building, or a property located in a designated rural area.
FHA loans, for example, come with certain mandates regarding the condition and age of the home. The property must undergo an inspection to ensure it meets safety and livability standards. Similarly, USDA loans require that the home is located in an eligible rural area, which is determined by the Department of Agriculture.
Buyers should also consider:
- The home being their primary residence; investment properties usually don’t qualify.
- Additional restrictions on the property type when aiming for VA loans.
Navigating these guidelines can get tricky, but understanding what you can and cannot purchase is essential before diving into the home-buying process.
Benefits of Government-Backed Mortgages
Understanding the benefits of government-backed mortgages is crucial for anyone entangled in the housing market, especially investors and financial advisors. These loans provide unique advantages that can make homeownership more attainable and less daunting. When we delve deeper into the components, we see these mortgages aren't just about lending; they offer a pathway to stability and growth in a fluctuating market.
Lower Down Payments
One of the standout features of government-backed mortgages is their remarkably low down payment requirements. Here's the thing: while conventional loans might demand 20% down—or even more—government options can allow as little as 3.5% for FHA loans or even zero down for VA loans if the borrower qualifies. This is a game changer, particularly for first-time homebuyers who might be tight on cash.
Imagine you want to purchase a home that costs $300,000. A traditional 20% down means you'd typically have to cough up $60,000 upfront. But with an FHA loan at 3.5%, your down payment would drop to a mere $10,500. That’s a significant reduction and makes homeownership much more accessible.
Moreover, lower down payments can facilitate quicker acquisition of property because buyers do not have to save for prolonged periods. Conversely, it also means that more individuals can invest in their first property sooner, stimulating market demand.
Competitive Interest Rates
When it comes to interest rates, government-backed mortgages often deliver more attractive offers than their conventional counterparts. This happens largely due to the backing these loans receive from federal entities like the Federal Housing Administration and Department of Veterans Affairs. Since these loans are less risky for lenders, they can afford to extend favorable interest rates to borrowers.
Now consider this: a borrower taking a conventional loan at a rate of 4.5% might end up paying substantially more over the life of the loan compared to someone with a government-backed mortgage at 3.75%. Even a slight interest rate difference can save thousands over time.
In the grand scheme of things, lower interest rates coupled with reduced down payment thresholds make investing in a home considerably less intimidating. Not only does it reduce the financial burden, but it can also lead to healthier housing market dynamics as more individuals opt for homeownership.
Accessible Financing
Another compelling reason to lean towards government-backed mortgages is the accessibility they provide. These loans are designed with a particular aim: to assist individuals who, under normal circumstances, might find it challenging to qualify for conventional loans. Whether due to lower credit scores, irregular income, or a lack of substantial assets, the criteria are typically more lenient.
For instance, FHA loans can cater to borrowers with credit scores starting from as low as 580 with a minimal down payment, whereas conventional loans might require scores over 700. This inclusivity opens doors for many who have been historically marginalized by traditional lending standards.
In essence, government-backed mortgages serve as a bridge, enabling individuals who may otherwise be sidelined to secure financing for their homes.
In summary, the appeal of government-backed mortgages lies in their capacity to reduce down payments, offer competitive interest rates, and enhance accessibility. For investors and advisors eyeing the housing market, understanding these benefits can provide a clearer lens through which to view potential investments, making it vital to consider these options within any comprehensive financing strategy.
Challenges and Considerations
When delving into government-backed mortgages, understanding the challenges and considerations that come along is crucial. These aspects can significantly impact a borrower's journey, affecting everything from monthly payments to long-term financial health. While government-backed loans present numerous advantages, like lower down payments and advantageous interest rates, they aren't without their pitfalls.
Mortgage Insurance Costs
One of the most talked-about elements in the realm of government-backed mortgages is mortgage insurance. For instance, FHA loans require borrowers to pay Mortgage Insurance Premiums (MIP), which can add a not-insignificant amount to monthly expenses. This insurance is aimed at protecting lenders in case of default. However, it can create a double-edged sword for the borrower.
- Affect on Affordability: Higher overall costs can lead to stretched budgets, possibly eclipsing the benefits of a lower down payment.
- Duration: Unlike conventional loans where insurance can be dropped once you hit a specific equity threshold, MIP remains for the life of the loan if you make a minimal down payment. This can turn what seemed like an attractive option into a long-term financial commitment that feels burdensome.
Loan Limits
Loan limits are another critical aspect to be mindful of. Each government agency has its own lending cap, and for many, these limits can be a limiting factor. The Federal Housing Administration, for example, imposes loan limits that fluctuate according to county, which can sometimes feel constricting to homebuyers in high-cost areas.
- Regional Variability: This can mean that a household in a rural part of the country might have a significantly different borrowing capacity compared to a household in a metropolitan area.
- Overextension Risk: With an insufficient loan limit, some buyers might feel the need to stretch financially to find a suitable property, leading to a potential financial crunch.
Regulatory Changes
Government-backed mortgages operate within the framework of ever-changing policies, which can leave borrowers scratching their heads. Changes in regulatory guidelines can occur on a dime and can introduce complications to the lending landscape.
- Effects on Borrowers: Regulatory flux might change eligibility criteria, expand or tighten loan limits, or adjust insurance premiums. This can dramatically reshape what was previously a stable pathway to homeownership.
- Market Reactions: Investors and lenders may react unpredictably to these changes, leading to temporary disruptions that can significantly affect mortgage availability and interest rates. For example, an unexpected uptick in required reserves might restrict a lender's capacity to issue new loans, creating a bottleneck in the market.
"Navigating the complexities of government-backed mortgages is akin to walking through a maze; one must always be aware of shifting regulations and inherent costs."
Understanding these challenges can empower borrowers to make informed decisions, weighing the pros against the cons effectively. With a strong grasp on costs, limits, and potential regulatory shifts, individuals can navigate the mortgage landscape more confidently.
Application Process
Understanding the application process for a government-backed mortgage is essential for anyone looking to navigate the complex waters of home financing. This process can often feel daunting, but breaking it down into steps can help demystify it. Ultimately, knowing what to expect can save applicants time, reduce stress, and set them up for success in securing their mortgage.
Pre-Approval Steps
The first step in applying for a government-backed mortgage typically involves seeking pre-approval. This phase is crucial because it establishes the potential homebuyer’s financial standing with a lender, indicating how much they might qualify for. During this stage, lenders evaluate your financial information, which includes credit history, income, current debts, and other factors determining your eligibility.
- Gather Financial Documents: This documentation often includes tax returns, pay stubs, and bank statements. Some people find that creating a checklist helps keep everything straight.
- Credit Check: Lenders will review your credit score. A good score can make a significant difference in the interest rates offered.
- Meeting with a Lender: Having a face-to-face discussion can clarify any questions you have and provide deeper insight into what to expect from the pre-approval process.
Taking these steps can provide reassurance that you are on the right path, aligning your financial capabilities with your homeownership goals.
Documentation Requirements
Once you acquire pre-approval, the next phase involves gathering the necessary documentation. The following papers are typically required:
- Proof of Income: This may include recent pay stubs, W-2 forms, or even a letter from your employer verifying your position and salary.
- Tax Returns: Many lenders will ask for the last two years of tax returns.
- Bank Statements: These statements help lenders verify that you have the necessary savings for both the down payment and closing costs.
- Identification: A government-issued ID, like a driver's license or passport, is usually required.
Having organized, up-to-date documents can expedite the initial review process significantly, making lenders more willing to work with you. Properly submitting your documentation reflects a level of professionalism and preparedness, potentially earning you a nod of approval from the lender.
Closing Process
The closing process is where the magic happens, finalizing the entire application journey. This stage can feel overwhelming due to the number of documents and details involved. Here’s what you can generally expect:
- Review Closing Disclosure: A few days before closing, you will receive a Closing Disclosure that outlines the terms of the loan, monthly payments, and closing costs. Take time to review this document closely.
- Final Walkthrough: Before closing day, conduct a walkthrough of the property to ensure everything is in order. It’s typically the borrower’s last chance to catch any discrepancies.
- The Closing Meeting: Here, you'll sign multiple documents, which may include the mortgage agreement and property deed. This meeting may involve the lender, an attorney, and possibly a real estate agent.
“It’s crucial to be prepared for this meeting and ensure that all parties are clear on the terms. Don’t be afraid to ask questions if there’s something you don’t understand.”
- Funding: After all documents are signed, the funds will be dispersed, typically enabling you to acquire the keys to your new home.
Completing the closing process means you’ve crossed the final hurdle in securing your government-backed mortgage. Each element of your application plays a vital role in this journey, turning the dream of homeownership into a reality.
Impact on the Housing Market
Government-backed mortgages play a pivotal role in how housing markets function, influencing affordability and competitive dynamics in the real estate landscape. By acting as a safety net, these mortgage programs enable a wider swath of potential homeowners to enter the market, effectively shaping demand and supply levels. This section delves into two critical subtopics: affordability metrics and market competition, which together paint a comprehensive picture of the implications these mortgages have on the housing sector.
Affordability Metrics
One of the most significant contributions of government-backed mortgages is the enhancement of affordability for many homebuyers. These loans typically come with lower down payment requirements and more lenient credit score standards, which empower individuals and families who may otherwise struggle to secure financing.
Affordability can be measured through various metrics, including:
- Debt-to-Income Ratios: Government-backed loans often allow higher ratios, making it accessible for more buyers to manage their debts alongside mortgage payments.
- Monthly Payments: Due to lower interest rates associated with these loans, monthly payments can be considerably lower than those associated with conventional loans.
This accessibility brings more buyers to the table, pushing homeownership rates higher, especially among historically underserved communities.
"Government-backed mortgages widen the doorway to homeownership for those who might find traditional paths blocked."
It's important to recognize, however, that an influx of buyers can lead to increased demand, thereby influencing housing prices. A more significant number of buyers in the market can inadvertently escalate prices, which raises new concerns about long-term affordability as income growth might not keep pace.
Market Competition
The introduction of government-backed mortgages increases competition within the housing market. As these loans made available a larger pool of buyers, sellers can find themselves with multiple offers, potentially driving up property prices. Additionally, this heightened competition can unintentionally lead to bidding wars, where individuals are pressured to exceed their budget to secure a desirable property.
A few effects of increased competition include:
- Rising Home Prices: A surge in buyer interest typically leads to higher housing prices, which can challenge affordability, particularly for first-time homebuyers.
- Impact on Inventory Levels: Increased competition can reduce the available inventory of homes, as properties sell quickly, leading to a tighter market where fewer options exist for buyers.
In essence, government-backed mortgages don’t simply make homeownership feasible; they can also set off a chain reaction that impacts the entire housing market, creating a complex interplay between affordability, buyer demand, and pricing dynamics.
Future of Government-Backed Mortgages
The future of government-backed mortgages stands at a crossroads, shaped by shifting market dynamics, evolving borrower needs, and the ongoing influence of legislative changes. As the real estate landscape transforms, understanding where these mortgage options are headed is crucial for investors, financial advisors, and analysts alike. The arrangements supporting homeownership through government initiatives are under constant review, which highlights their significance not only for individual borrowers but also for the wider economy.
This section explores factors such as policy changes and technological advances, both of which hold the potential to redefine the parameters and accessibility of these mortgage products in the coming years.
Policy Changes
Policy changes play a pivotal role in how government-backed mortgages adapt to economic fluctuations. New legislation or alterations to existing policies can either enhance accessibility or impose stricter limitations on these loans.
- Regulatory Adjustments: Organizations like the FHA, VA, and USDA are required to respond to economic factors. Adjustments may lead to alterations in loan limits, insurance premiums, and eligibility criteria.
- Market Conditions: If the housing market spikes or descends, regulatory bodies might change their approach. For example, in a booming market, there could be pushes for higher loan limits to keep pace with rising home prices. Conversely, during downturns, stricter measures might be enacted.
These shifts are often reactionary but can have lasting implications on borrowers’ ability to access financing. Stakeholders must remain vigilant, analyzing legislative trends as they unfold.
Technological Advances
As with many industries, technology is making a substantial impact on government-backed mortgages. Innovations range from automated application processes to enhanced data analytics, resulting in a more streamlined experience for all parties involved.
- Streamlined Processes: Digital technology allows for quicker loan approvals and reduced paperwork. Borrowers are increasingly using online platforms which make the application process feel less daunting.
- Data-Driven Decisions: Advanced analytics enable lenders to better assess risk and tailor loan products that fit specific borrower profiles. This can potentially increase access for underserved populations.
- Secure Transactions: The use of blockchain and other secure technologies aims to minimize fraud in mortgage lending. Ensuring secure and transparent transactions is essential in fortifying borrower trust in the system.
Impacting both the borrower experience and lending practices, technological advancements promise to shape the future of government-backed mortgages significantly. As society embraces digital transformations, financial institutions must also adapt to remain within reach of the contemporary consumer.
"The interaction between policy and technology will likely create a more favorable environment for both homebuyers and lenders."
By grasping these elements, stakeholders can better navigate the intricate world of government-backed mortgages in an ever-evolving landscape.
Culmination
Understanding the realm of government-backed mortgages is crucial for anyone considering home financing options. This article has unraveled numerous facets of these loans, establishing their significance in the broader financial landscape. Reflecting on the benefits, eligibility rules, and potential pitfalls, it becomes clear why these mortgages attract many borrowers. Whether one is a first-time homebuyer or a seasoned investor, grasping the intricacies of these loans can lead to informed decisions, ultimately translating to substantial benefits.
Summary of Key Insights
To encapsulate our discussion, here are some critical points:
- Safety Nets: Government agencies like FHA, VA, and USDA provide crucial backing that can shield lenders from losses, thus encouraging them to offer loans at favorable terms.
- Diverse Options: With different types of mortgages catering to varied populations—like veterans or rural homebuyers—there’s a suitable choice for many.
- Costs and Considerations: While lower down payments and competitive interest rates are attractive, borrowers must consider factors like mortgage insurance and loan limits.
- Impact on Market: These mortgages do not just benefit individuals; they help maintain stability within the housing market by stimulating demand and encouraging homeownership.
In all, government-backed mortgages have paved pathways for numerous individuals, transforming aspirations of homeownership into tangible realities.
Final Thoughts
As we wrap up this exploration, the takeaway is simple: being well-acquainted with government-backed mortgages equips potential borrowers with the knowledge needed to navigate their financing journey more effectively. In a constantly evolving housing market —impacted by shifts in policy and technology—it’s vital to remain informed. Continuously evaluating benefits against potential challenges will empower homeowners to make strategic choices that suit their financial situations.
Ultimately, government-backed mortgages can be a powerful tool for securing a home, provided one approaches them with clarity and careful planning. For deeper insights, discussions, and updates, engaging with resources such as Wikipedia, Britannica, or even community forums like Reddit could be beneficial.
"Knowledge is power; thus, understanding your options in government-backed mortgages is not just beneficial but essential."
In this pursuit of homeownership, always remember: the more informed you are, the better decisions you can make.
