Over the last few years, we've watched interest rates decline to rock-bottom levels. For instance, the average 30-year mortgage was recently 4.35%, which is more than one point above the 2012 low of 3.3%. Most homeowners or potential homebuyers believe that these historically low rates are no long available but that's not the case. Financial expert Mark Lamkin from Lamkin Wealth Management explains the five strategies that will help you prepare for those rising rates.
1) NO MORE RECORD RATES, BUT LOANS ARE STILL CHEAP. The economy is anticipated to continue to improve and as a result, rates will slowly move up. By the end of 2014, Freddie Mac expects the 30-year mortgage rate to reach 4.7%. These rates are still very good compared to relative rates over the last 20 years, but rates are still attractive and In my opinion, they are NOT going back down…buy now!
2) THE REFINANCING OPPORTUNITY IS STARTING TO CLOSE. The recent increase in rates has already slowed down potential homeowners interested in refinancing. Rising prices moved 850,000 homes into the black in the first quarter, stated by CoreLogic. Additionally, the National Association of Realtors said the average credit score for an approved mortgage has been 761, which is a slight up from the normal 720. If you can save a percent or more by refinancing and plan to be in your house ten years or longer, then please talk to a credible mortgage broker.
3) WHEN YOU'RE TO BUY, LOCK-IN. You can't stop the mortgage rate ping-pong, but you can maximize your chance at a good rate. It's important to time your interest rate lock, so you're covered, if rates rise. If you are looking to buy, go ahead and lock those rates in. Fixed rate 30 year loans should be locked in because Lamkin feels rates are NEVER going to be cheaper in our lifetimes. Go fixed NOT adjustable if you're going to stay long term.
4.) 401K= DURATION if you own a bond fund like most investors do in their 401k or their investment allocation, make sure your duration is below five. Preferably own high yield bonds and or adjustable rate corporate bonds right now. This is very, very important right now and most people have never checked this… PLEASE check this as it can cost you years and years of returns on your fixed income portfolio….
5.) CREDIT CARDS: make sure you lock in great rates…. Call your credit card company right now and negotiate good FIXED credit card rates and have them locked in not variable. If they wont work with you, google credit card offer and chat with several reputable cards about balance transfers. Think reward card.
Lamkin Wealth Management
5151 Jefferson Blvd., Suite 102
901 Lily Creek Drive Ste. 102
office: 502-961-6550 Office
toll free: 866-961-6550
"Securities Offered Through LPL Financial, Member FINRA/SIPC and an Investment Advisor"