High Time to Cash in on Low Rates

Stock market volatility, a depressed real estate market, and low-yielding Treasury bonds make debt refinancing an attractive option for consumers. “People holding debt are seeing that it’s time to refinance,” says Timothy Swanson, the Metro Detroit manager for J.P. Morgan Private Wealth Management. “It’s a good time to borrow because rates have never been this low.” The key for success in refinancing is to have strong credit, search for bargains, and account for any refinancing costs. With credit cards, for example, balance transfer offers dried up when the economy plummeted, but now offers are on the rebound, says Bill Hardekopf, CEO of LowCards.com. “You can find cards that give you 0 percent on balance transfers for 12 months or even up to 18 months,” he says. The catch to this is the transfer fee, which is placed on the card immediately and can be as high as 5 percent. The steady drop in rates has driven even 30-year home loans to an average of less than 4.5 percent in August. “The 30-year mortgage rate is lower than it’s ever been while I’ve been in the business,” says Swanson. Borrowers with a deep investment portfolio can work around a loan balance that exceeds the appraisal price by using investment assets to support the mortgage along with the property. This permits them to get some value out of their stagnant stocks without having to cash out before the stock market rebounds. | Read More