In response to the economic effects of the COVID-19 virus the Federal Reserve once again lowered interest rates to 0 – .25%. What does that mean for us? It normally means that banks will lower the interest rates for consumer products such as car loans and mortgages. Now may be a great time to:
Buy or Refinance a Home
Mortgage rates have dropped to as low as 3.47% for a 30-year loan. Rates have been very low for years, but they haven’t seen these lows since 2016. If you’re in the market for buying a home, you’re in the proverbial sweet spot. And if your current rate is 4.5% or higher, you could benefit by refinancing your home. Just be sure to do your due diligence and compare refinancing costs as they can be considerable.
Refinancing your Car Loan
Mortgage debt isn’t the only debt you should be looking to refinance. If you still have a few years remaining on your car loan you should shop around for refinance rates. Especially if you’ve raised your credit score since your initial purchase. Bank of America is currently offering refinance loans as low as 3.69% for customers with good credit.
Consolidating Debt
If you have multiple debts that you are struggling to pay off due to the high interest payments, now might be a good time to consider debt consolidation. Companies such as Sofi, Prosper, and many brick and mortar financial institutions are offering loans to consumers at reasonable interest rates. Please be sure to comparison shop before selecting a lender. You can start looking at options by clicking here.
Real Estate Investment
For those of you with money to invest but are hesitant to put it in stocks right now, investing in real estate is a viable option. If you have the capital, purchasing an investment property can be quite profitable with current interest rates.
If you don’t have a large amount of cash to spend, you can take advantage of real estate investing through REITs (Real Estate Investment Trusts). REITs are traded on the stock market so like most other stocks right now they are taking quite the beating. That could be a great buying opportunity for some, but for others it would introduce risk they are trying to avoid. If that is the case, you can choose a crowd funded REIT such as FUNDRISE or RealtyMogul. These platforms are privately owned and invest in real estate projects with investor money. I have a small position in Fundrise and I am happy with the results so far.
When life throws you lemons, you make lemonade. Managing your money is a dynamic process that requires you to think outside the box for ways to make your money work most effectively for you. If you are looking for other ways to invest in this market, check out my article entitled, How Do I Take Advantage of Market Turbulence.
