Welcome to 2019!
I hope you had a great holiday and are looking forward to another year beginning.
2018 was a challenging year. The Federal reserve raised interests rates four times – yikes! The stock market lost all of it’s gains for the year. What does that mean to you? Rising interest can mean larger monthly payments. Stock market loses could mean less money for retirement. Let’s talk about what rising interest rates means to your wallet.
Mortgages / Home Equity Lines
Do you have a fixed or variable interest rate on your mortgage? If you have a variable rate, that could mean your interest rate could go up. For an adjustable rate first mortgages, they typically change at a certain point (see you mortgage documents), but most home equity lines of credit change as interest rates change. High interest rates means larger payment is due. This might be the time to modify to refinance to a fixed rate.
Most credit cards typically have variable interest rates. High interest means a larger minimum payment is due. If you carry a balance from month to month, you may want to transfer your debt to a zero or lower interest rate credit card while you are paying down your debt.
You never know what is going to happen, so you need to be prepared for whatever life throws at you. Be proactive and your debt paid off, so that interest rate hikes won’t hurt your finances.