ANCHOR: THE FEDERAL RESERVE MEETS TODAY, AND WORD ON THE STREET IS THAT THE FEDERAL FUNDS RATE WILL BE LOWERED AGAIN.

ANCHOR: BUT IT LOOKS LIKE CONSUMERS MAY BENEFIT THIS TIME AROUND. MONEY AND REAL ESTATE EXPERT ILYCE GLINK IS HERE WITH THE DETAILS.

GOOD MORNING.

ILYCE: GOOD MORNING. FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN IS EXPECTED TO LOWER THE FEDERAL FUNDS RATE TODAY, PROBABLY ANOTHER HALF POINT. IF THE INTEREST RATE DOES DROP, IT WILL BE THE NINTH DROP THIS YEAR. CURRENTLY, THE FEDERAL FUNDS RATE STANDS AT 3 PERCENT. WHILE THE RECENT DROPS HAVEN’T DONE MUCH FOR CONSUMERS, TODAY’S DROP COULD FINALLY HELP LONG-TERM INTEREST RATES COME DOWN SIGNIFICANTLY. IN FACT, ANTICIPATING A DROP, LONG-TERM RATES RALLIED, AND THE INTEREST RATE DROPPED. TAKE A LOOK AT WHERE INTEREST RATES ARE TODAY.

INTEREST RATES TODAY

30-YEAR FIXED RATE: 6.75%
15-YEAR FIXED RATE: 6.25%
1-YEAR ARM: 5.50%

ILYCE: IF YOU’RE WILLING TO PAY A POINT, OR OTHER FEES, YOU CAN GET A 30-YEAR FIXED RATE LOAN FOR ABOUT 6 PERCENT, AND A 15-YEAR LOAN FOR UNDER 6 PERCENT. FOLKS, THESE ARE RATES WORTHY OF A REFINANCE, AND IN FACT, I’VE ALREADY CALLED OUR MORTGAGE LENDER FOR A QUOTE FOR MY OWN PROPERTY. WHO SHOULD REFINANCE?

WHO SHOULD REFINANCE?

LOAN WITH INTEREST RATE OVER 7.25%
GOOD CREDIT
HAVE EQUITY
NEED CASH

ILYCE: (AD LIB OVER GRAPHIC). BEFORE YOU START GATHERING YOUR PAPERWORK, BE SURE TO CHECK YOUR OWN LENDER TO SEE IF YOU CAN “STREAMLINE” YOUR CURRENT MORTGAGE.

CAN YOU “STREAMLINE” YOUR LOAN?

ASK LENDER
PAY FEW HUNDRED DOLLARS
CAN’T STREAMLINE FHA LOANS

ILYCE: (AD LIB OVER GRAPHIC). TRY TO PAY AS FEW FEES AS POSSIBLE, AND IF YOU CAN SAVE WITH A NO-COST LOAN – IF YOU CAN FIND ONE, THAT IS – GREAT. BECAUSE DEPENDING ON HOW FAR SOUTH THE ECONOMY GOES IN THE CURRENT RECESSION, LONG-TERM INTEREST RATES MAY FALL AGAIN, AND YOU MAY WANT TO REFINANCE THEN, TOO.

ANCHORS: SHOULD YOU TAKE OUT MONEY WHEN YOU REFINANCE?

ILYCE: IT DEPENDS WHAT YOU’RE GOING TO USE THE MONEY FOR. IF YOU’VE GOT CREDIT CARD DEBT YOU’RE PAYING 25 PERCENT FOR AND CAN TRADE THAT IN FOR DEDUCTIBLE DEBT OF 7 PERCENT OR LESS, THEN YES. BUT YOU NEED HOME EQUITY AND ENOUGH INCOME TO MAKE THOSE NUMBERS WORK.

Published: Oct 2, 2001