Mortgage interest rates hit another low.
Today’s Economic News:
Another crazy week for economic news. We saw our first report from the widely-respected Economic Cycle Research Institute that the economy may have technically gone into a recession last quarter (officially defined as two consecutive quarters of negative growth) or will this coming quarter (4Q2011). ECRI has correctly called the last three recessions without any false claims in between.
What’s changed now? As ECRI explains on its website:
A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator. That’s what a recession is all about.
The big concern is that the ECRI isn’t saying we’re in a good economy and going into a bad one. We’re already in a bad one. As the blog points out, “If you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street.”
I don’t know about you, but I’m very worried about what another deep world recession will do to Americans who have already been hit pretty hard in the pocketbook. Clearly, there’s more to come on this story, so stay tuned.
We had a lot of calls about refinancing on the show today. And why not? Mortgage interest rates hit another record low this week. That makes four new lows in the past five weeks, and the Federal Reserve says if the economy continues to decline, it will continue its easing – focusing on pushing down long-term interest rates even further.
So, go ahead. Refinance. If you can. And, that’s the rub. Not everyone can refinance. You need great credit, tons of equity in your home and plenty of cash for closing costs. And even then, you might have problems. For more real estate advice take a look at the other articles I have on refinancing, choosing a mortgage lender and on the state of the housing market.
Remember, when considering a new mortgage loan, the low interest rate is only one part of the equation. You still need to consider closing costs. And if you are buying a home, those closing costs can be significant.
This week’s CBS MoneyWatch.com story points out the five refinancing mistakes you don’t want to make.
Bank of America Charging $5/Month for Most Debit Accounts
Bank of America has 37.8 million customers with a debit card. Now, most of them will pay $5 per month for the privilege of using that card. That’s a $60 fee per year – all to stay off of credit and be more responsible with your money.
Why are the banks going in this direction? You can blame the new “swipe fee” law that was passed last week. It cuts in half the amount that banks can charge stores each time a consumer used plastic. And, last year, Congress passed legislation that placed a ceiling on overdraft fees banks can collect. You’ve got to pay the piper somehow, right? Well, look for banks to add additional fees. Banks, look for consumers to figure out other ways of spending their money, including checks, cash or credit cards.
We had a number of callers who wanted to know how to check out school districts in other parts of the state or country. You can hire SchoolMatch.com to assist you with that search. If you don’t mind doing the legwork yourself, contact the state’s department of education and get a list of all of the test scores in a particular county. The state should rank school districts by test scores, and perhaps other measures, so you can get a clearer picture of what is offered.
Follow up with the school district directly and be sure to check out the districts website. You can find out a lot of information online.
SavingForCollege.com – the best place to check out 529 College Savings Plans
I don’t know how long Joe Hurley has been running SavingForCollege.com, but it has become the go-to place to compare state 529 plans on an apples to apples basis. Hurley has also written a definitive book on the subject, available for sale at the site. It’s a great place to go for this kind of information, though typically you’re best off going with your own state plan.
Thanks for listening to the show. Tune in next week Noon to 2 ET for another edition of the Ilyce Glink show.