If you watch the news or have tried to borrow money any time recently, you know interest rates have increased A LOT this year. New mortgages 30-year fixed mortgages are averaging more than 7%. Drastically different from the 2.5-3.5% you could get during covid. In this episode, Corey and Rachelle ask, “what should we do differently?”
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It’s not all bad news!
- High-interest savings accounts have variable interest rates.
- If you don’t have one yet, you can set one up and likely get a 3% annual yield or more.
- Bond yields have also increased dramatically. More conservative investments now have more to offer.
- If you have an existing fixed-rate-mortgage, your home payment is much more affordable than it would be if you had to take out a similar-sized loan today.
New and variable-rate debts are the challenge.
- If you are in the market for a new home, you may need to adjust your budget or save a larger down payment.
- Run the numbers to see what fits in your budget and try not to stretch yourself too thin.
- Review your existing debts to see if any other items have a variable interest rate, and try to pay them off if the rates are getting too high.
- This can include home equity lines of credit and even private student loans.
- Prepare yourself if you have an Adjustable-Rate Mortgage. Educate yourself on when your rate can increase and how much it is allowed to increase.
- When thinking about new purchases, find out what your financing options before deciding to buy.
- It will be much harder to come across low interest financing.
- It may make sense to purchase more things in cash or even delay large purchases.
When things change, sometimes we need to adjust our plans and expectations. Review your own finances and goals to see if you can adjust anything to make your situation better. If you have questions, email us at podcast@thefinitygroup.com.
For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance