Thursday, November 11, 2004

In The News: The Fed's meeting statement revealed that the committee had raised its target forthe feds funds rate by another 0.25%, lifting it to2.00%. The hike is part of a credit tightening campaign to bring rates back up to more normal levels now that the economy's recoveryfrom the 2001 recession is more deeply rooted.



Tip of The Day

Cash out refinancing may help assist consumers during the heavy buying season. Many borrowers stretch the funds out over several buying seasons as much as five years or so while including things like funding a business, providing a second income, saving for college tuition and investment funds. In this way cash-out refinancing proves to be a smart investment in ones future.



When refinancing your home saving money by lowering interest rates,monthly payments and saving thousands of dollars over the life ofthe loan is of primary concern.



MAKE "APPLES TO APPLES" INTEREST RATE COMPARISONS

When faced with the need to compare different rate/point combinations among lenders, first convert each quoted rate to one based on a constant number of points and then find the lender with the lowest rate. In making this conversion, consumers should use a traditional rule of thumb that equates each point to a 1/4 of 1percent change in the interest rate. This would make an 8 percentloan with 0 points equivalent to a 7.75 percent loan with 1 point.



DON'T JUDGE A LENDER BY ITS APPLICATION COSTS

Lenders who lure you with no costs at application can lay the fees on heavily at closing. Keep your eyes focused primarily on the interest rate and points.