Traditional financing for real estate involved attaining a mortgage. As we saw with the material this week, interest rates for a mortgage are either fixed rate or variable rate (adjustable or floating mortgages). Each of these types of loans have their benefits, as well as their drawbacks. With the information we have learned this week, along with your own research, address one of the following questions:

• Adjustable/floating rate mortgages may follow either the CPI (consumer price index) or the interest rates at the end of an adjustment period. Which method for determining the new rate do you think is the better methodCPI or current rates? Why do you feel this is the better method for calculating rate adjustments?
• A fixed rate mortgage has several advantages, such as having a continuous monthly payment and locking in your rate for the life of a loan. What are the disadvantages to having a fixed rate mortgage? How do these disadvantages impact your decision when choosing a loan?
• Would you rather be given $100 today, or $125 six months from now? Using the concepts of time value of money, support your decision.