Anxious for interest rates to rise in 2013? Stop worrying… The low rates of the past few years — which have warmed the hearts of mortgage applicants but been cold comfort to savers — are unlikely to budge soon. For that, we thank (or blame) the Federal Reserve. To spark growth, the Fed is aiming to keep the influential rate at which banks lend one another money between 0% and 0.25%, and it expects that number to be “exceptionally low” until at least mid-2015. “This is unprecedented,” says Baltimore financial planner Tim Maurer. “We’ve never had such low interest rates for such a long period of time.” Here are savings and credit strategies suited to the current climate: MORTGAGESFreeze your rate. Buying a home? Rates are at 40-year lows, so lock yours in with a fixed-rate mortgage; interest on a 30-year fixed was 3.57% in January. “It’s a sure thing,” says Keith Gumbinger of mortgage data provider HSH.com. Lower your term. Refinancing? If you’re certain to move within a few years, consider an adjustable-rate mortgage; initial rates on five-year ARMs were 2.68% in January. Otherwise, use low rates to shorten your mortgage’s term and cut interest costs. Should going from a 30-year mortgage to a 15-year be too big a payment hike, get a 20-year version. (About 15% of refinancers opt for a 20-year, says the Mortgage Bankers Association, up from 12% in 2011.)2013: Expect same low interest rates. You’d pay $905 a month on a 30-year $200,000 mortgage, $1,370 on a 15-year, but only $1,165 on a 20 (though 20-year loan rates are only slightly lower than 30-year rates). Run the math with the mortgage calculator at bankrate.com. SAVINGSGo long on CDs. Amid weak rates, park cash in a long-term CD with low withdrawal penalties, says Colorado Springs financial planner Allan Roth. Put $50,000 in an Ally Bank (ally.com) five-year CD, lately yielding 1.58%; if rates rise, walk away in two years with $1,469 in interest (after a charge that cuts your rate to 1.45%). The same money in an average two-year CD yielding 0.45% would net only $451. Beware rising-rate come-ons. Banks’ new lure for savers: CDs with an option for a higher yield if rates rise. The catch is that you usually get a low initial rate. “Shop around. Compare the rising rates with the fixed equivalent,” says Larry Swedroe, research director at Buckingham Asset Management in St. Louis.If you or anyone you know are thinking about buying a home or even just curious about where the current market of real estate is I would love to talk more about this with you. Please give me a call at (480) 290-6959 or email me at email@example.com. You can also check my website out at www.arizonaelitehomes.com to get more information.
Author:Carlie Goulet Emily Duarte Phone: 480-999-2338 Dated: May 30th 2013 Views: 133 About Carlie Goulet: What We Stand For
The Benefits of a Team:
We found that using a team of specialists is the bes...
View our latest blog posts in your RSS reader. Click here to access.
Lux Home Group at Keller Williams Realty is comprised of FULL TIME real estate professionals in the Phoenix area. Real Estate is not only our job, it is our passion. So, if you are interested in buying, selling, or renting a home in the greater Phoenix Metropolitan Area, or you would like to get involved in the fabulous world of real estate sales or investing, give us a call at 480-788-9660 or email us at Info@LuxHomeGroup.com. If you just want to hang out with some super fabulous people...you can call us for that, too.
No need to look any longer to find your new home... Here it is! Tastef
"I was probably one of Carlie first clients, way back in 2002. Even in the early days she was extremely professional and fun to work with at the same time. She really helped me evaluate my options in Arizona. When life circumstances suddenly changed for me, she shifted gears and helped me find a home in Texas. "