FRM Interest Rate Stable at less than 5%

Out of the 10 major cities surveyed this month, 8 of the cities’ financial institutions have recently been offering fixed-rate mortgages at less than 5%.

This is a substantial jump from July, back then only one city offered mortgage rates at less than 5%.  This is almost a return to the way things were in November; average mortgage rates were at an all time low and you could get an FRM in every one of the 10 cities for less than 5%.  The data for the interest rates in each city is available on the databases of Bankrate.com, and Interest.com.

The most popular mortgages among borrowers are 30-year fixed rate loans with neither points nor fees of less than $2,000.  A comparison such offerings from different banks yielded these results:

Atlanta: 4.875% from AimLoan.com.
Boston: 4.875% from Gold Star Inc.
Chicago: 4.875% from Sterling Home Mortgage.
Dallas: 4.875% from Austin First Mortgage.
Los Angeles: 5.00% from Integrity First Financial Group.
Miami: 4.75% from Quick Quote Mortgage.
New York: 4.875% from EverBank.
Phoenix: 4.875% from Interstate Mortgage Service, Inc.
San Francisco: 4.875% from Mortgage Capital Associates.
Seattle: 4.875% from American Interbank.com.

There are conditions though:  Such mortgages are only for conforming loans of less than $417,000, and borrowers need to have credit scores of 700 or better.  Scores from 680 to 699, are allowable, but at a higher rate; at least 1% of the loan value or even higher.

High Yield Checking Accounts are Still Solid

A little over a year ago, the market was nearly saturated with high-yield or high reward checking accounts.  Some of these offerings had us wondering if this was too good to be true, and how long it could be sustained.  We recently decided to take another look to see whether or not these rates have remained high over a year later.  What is surprising is that apart from one notable exception, the rates have remained high.  Yes, they have slid somewhat, but checking account interest rates have not fallen as much as the other account types.  They still yield more returns than the most attractive CDs (for more information on the various account types and how they are different from one another, you can refer to The ABCs of Rewards Checking).

The only bank that bucked the trend and cut its rates is Malvern Federal Savings Bank near Philadelphia.  In March of 2009, having a checking account there would have given you 5.01% APY, that figure has dropped substantially to 1.50% APY.  By contrast, the MAXimum Free account at Focus Bank, with 12 branches in Arkansas and Missouri, was and is now paying out a solid 4.51% APY.

In Oklahoma, AmericaNet and two jointly-owned banks were giving 5.25% APY last spring, and while they have cut this quite a bit, the current offering of 4.00% APY is still very good.   Until just recently, Bank of the Sierra, which has dozens of branches all over central California, was able to maintain a 4.51% APY, just a few months ago, they lowered it to 4.09% APY.  Union State Bank was at 5.01% APY last year, but has since cut its rate to 3.25% APY.  Union State Bank has 4 branches in Kansas.  In Tampa FL, Patriot Bank was at 4.01% APY last year, but is now down to 3.01% APY.  Apart from AmericaNet and Bank of Sierra, all of the banks mentioned now limit new accounts to their state or locality.

Highest 5 – year CD rate, slides to 3.30% from 3.44%

The best CD rates on the market just became a little less attractive as EverBank cut the interest on its highest yielding 5-year CD to 3.30% annual percentage yield, from 3.44% recently.  Still, the online bank based in Florida remains the place to go for the best available 5-year CD rates in the country.  This has been the case since March 16 on this year.

From March 16 to April 2, the rate actually increased gradually form 3.30% to 3.44%, but eventually came back down to 3.30%.  Nationally, the average for 5-year CD APYs has risen to 2.14% from a record low of 2.06% in late January of this year.

EverBank only asks for a minimum deposit of $1,500; however, they do slap higher penalties than most banks for pre-terminations; 25% of the interest you would have earned if you’d kept the account for the length of the term.

Apart from EverBank, the best rate is 3.25% APY, you can get this rate from:

An online division of Flushing Savings, igobanking.com requires only a $1,000 minimum deposit.

Miami Lakes base BankUnited asks for a $5,000 deposit, they have 75 branches in FL.

Have a look at our database where you can find CD rates listings for many other banks, and find yourself a great deal.

Jobs for College Kids in Trying Times

With respect to employment, perhaps the worst hit demographic during the current recession has been teens. The department of labor reports that there is a very high unemployment rate of 20% among teenagers aged 16 to 19. This is the highest unemployment rate among workers with respect to the different age groups. Teens of this age are often still financially dependent on their parents, if not, they usually still get a lot of financial support from them. Worse yet, if kids are not in college, they no longer qualify to be in their parents insurance.

A lot of kids are in need of spare cash, especially in the summer. For teens in need of employment, here are some summer jobs of which they may not have thought:

Internships and apprenticeships
Kids often bypass internships and apprenticeships in favor or earning higher wages when they get out of college. Long term though, internships and apprenticeships can open doors to more lucrative opportunities in the future. With the employment situation being what it is, internships and apprenticeships are better than not having a job at all, they also offer big potential rewards in the future.

Tom Cath, director of Valparaiso University’s career center in Valparaiso says these particular career outlets are “solid investments” in the future of college students. However, alot of these opportunities are not advertised within schools and universities. Students need to take initiative to search and apply for these opportunities. They could become future employers whether there’s a listing or not. It may be tough to find an internship that pays well these days, but apprenticeships always pay relatively well. If you are content with just gaining experience and improving your resume, there are a lot of unpaid internships open.

Should you find yourself having to settle for an unpaid internship, Cath advises that you should at least ask for a meal, parking and or a transportation allowance. Be sure to ask your school for academic credit as well. That way you can get some financial help from your job. Cath also advises students to inquire about internships at their schools’ career centers, or financial aid offices, such jobs could also be of help financially.

Cooperative learning programs
An option that has been available for some time, but that is worth looking at these days, is a cooperative learning program. Cooperative learning programs are designed so that students can go to school, and earn at the same time. A student studies full time for one semester, then spends the next working at a job related to his or her field for the next semester.

According to the National Commission for Cooperative Education, a Boston-based advocacy group, co-op students usually bring home more money than kids with summer jobs. With a co-op learning program, a kid can earn between $200 to $1,167 per month. What’s more, 95% of kids on co-op learning programs find jobs immediately after graduation. Interested parties can go to their school’s career center or experimental learning office to ask what co-op learning programs are available.

Research grants
Research grants are really great opportunities to improve your resume and make a bit of money on the side as well. Colleges often offer these, so do a lot of private companies and government entities. A lot of college students use research grants to pay for their board and lodging while they are in school. It is best to apply for grants as early as February or March, it they are looking for grant in the fall semester, they need to start looking in the spring.

The most convenient and logical place to start looking is your school. If you can’t find anything there, you can try scholarship sites, government organizations post openings on students.gov, and even private corporations connected to your course.

24 month CD Interest Rates are down

Last November, lucky savers were able to take advantage of 2.60% APY from the highest earning 24 month CD rates of the time, from Jacksonville Bank. The best 2 year CDs available in the US now though, are from Country Bank which has 14 branches in central Massachusetts, their rate is 2.25% APY for a minimum deposit of $500. The CDs are not available online though, you’ll need to call a customer service representative to receive instructions on how to buy a CD via mail.

Other banks that offer top rates for 2 year CDs are:
-Gold savings bank, a single location in Mountlake Terrace WA offers 2.20% APY for a $10,000 minimum deposit.

-A community bank in Franklin TN offers 2.14% APY, for a $2,500 minimum deposit

-You can get a rate of 2.07% APY from the State bank of India for a $2,500 minimum deposit if you obtain the CD through their Chicago office, or $5,000 if you do it though the New York office.

Arguably the best deal around though is a rather unusual 25 month CD from Legacy bank that offers 2.90% APY.

If none of the rates are quite as attractive as you hoped for 24 month CDs, you might want to try looking around for a 5 year CD with high interest, and low pre-termination fines. In the end you may find one that is actually a better deal for a 2-year period. You can scan for available options on our database.

Invest Boldly When Money Market Rates are Low

Nowadays, money market rates are historically low. It’s difficult to find strong money market rates at the bank, so investors are looking elsewhere to get great yields. Here are a few tips to help you when you are looking to invest your funds.

Commodities Offer Consistent Demand
You can always invest in commodities, which are usually in high demand. Commodities such as sugar, salt, diamonds and many others can be purchased in bulk. It’s a good idea to consult a broker or a commodities expert before you begin investing in commodities. In addition, you need to be sure that you purchase a niche market as regards commodities. For example, you may not want to invest in cane sugar in general, but you could focus your commodity investment on cane sugar bulk for European consumers.

Customize Your ETF Strategy
ETFs are another great alternative to money market accounts. ETFs are exchange traded funds, which means they are baskets of securities that are tied to major stock indexes. You can purchase traditional ETFs or new, active ETFs. Active ETFs have a bit more liquidity and flexibility, but are also riskier. You can purchase customized ETFs that are based on a certain industry, such as aerospace or manufacturing.

Diversified Stocks and Bonds
Of course, it’s also possible to build a portfolio that contains a majority of stocks or government bonds. If you’re investing in stocks and bonds, then you should mitigate your risk through diversification of investment types. Diversification is often misunderstood. Good diversification means that you purchase many different types of securities, not necessarily different levels of risk.

For example, you can have a highly-diversified portfolio that is very risky, or you can have a highly-diversified portfolio that is very conservative. Diversification refers to your ability to minimize losses and thereby slowly gain profit from your investments.

Money Market Funds: A Conservative Approach
Money market mutual funds also represent a great investment opportunity. These funds contain a variety of very conservative investments, including bonds and bank accounts. You can purchase money market mutual funds through a brokerage firm or a bank. It’s also possible to customize your money market mutual fund. One of the most popular money market mutual funds is the Vanguard Prime Money Market Fund, which consistently gives great returns to investors. However, there are many to choose from.

At this juncture, money market funds offer greater yields than money market accounts. Interest rates at banks are very low, so it’s advisable to go out and take a bit of a risk in order to secure higher returns.

Retirement Accounts and Secure Investing
You may want to save your money for retirement, and in the case, a 401k or Roth IRA will serve your interests best. These accounts are particularly attractive due to their tax benefits. The money contributed to Roth IRAs isn’t subject to taxation, although there are contribution limits for these types of accounts.

Play the Market
Now is a good time to go out and take some risks. In a difficult economy, you can’t rely on banks to offer good interest rates. You have to create your own wealth. This means you need to look at alternative forms of investing. So, if you want to earn high yields off of your investment portfolio, then specify your niche, and diversify within that niche. You will find that you are able to earn more than you anticipated if you have a well equipped portfolio.

Efinance Your Way Out of Ridiculous Mortgage Rates

Many homeowners choose refinancing as a great way to reduce mortgage rates. While refinancing can help you save money in the long term, it’s only advised for people who have done the math and can safely deduce that refinancing will help ease their financial burden. Here, we’ll take an in-depth look at refinancing.

The Pros and Cons of Refinancing
Technically, refinancing is a process by which you renegotiate your loan so that you can earn a more favorable rate and better terms. In this sense, refinancing helps make your home more affordable.  Usually, the new loan will be placed against the dictated property as collateral, yet its value may or may not exceed the balance of the current loan.

Here are some reasons why refinancing might be a good option for you.
1.A desire to save more. If you can get a term extension or a lower rate, you might be able to save more. Extensions in terms could mean an increase in your savings, but an overall jump in interest.

2.You want to pay things off quicker. If you reduce the loan term, you can shorten the length of your mortgage. Since monthly payments will increase, overall interest will decrease. You’ll be on your way to owning your home in no time.

3.More cash liquidity. Refinancing can help you free up cash you need for various expenses. In this manner, you can pay off any high interest debts, or you can take care of credit card balances and any other loans you might have. This interest is not deductible, unlike mortgage interest.

4.Consolidation of 2 loans into one. If sufficient equity is there, you can consolidate the first and second mortgages and end up paying interest on only one mortgage.

5.Converting an adjustable-rate mortgage to a fixed rate mortgage. You can secure a low rate for the remainder of your term if you can get a good fixed rate.

6.Getting rid of your PMI. As long as your balance sits below 80% of the home value (as it has been appraised), then it’s possible for you to refinance without paying the PMI.

Why You Need to Build Up Equity
It’s incredibly smart to build up equity in your home before you refinance. This will give you more flexibility when you refinance. Also, make sure you refinance when rates are low. Be patient, as it doesn’t make sense to refinance just for the sake of doing something new. Be sure you pay off any late payments, but many lenders have restrictions that require borrowers to have made timely payments for the past twelve months.

Nitpick And Make Refinancing Work For You
Get rid of pesky negatives and improve your credit score. This will help you qualify for the best refinancing rates available. Lenders will be particularly picky about your credit score, so you need to make sure that you dispute any negative items and pay off any outstanding balances. Stay away from strange ‘bad credit’ refinance loans. These often have hidden fees and very high rates.

If you can hone your refinancing skills, you will end up with a much more affordable home than you ever thought possible. Take it slow.

The Skinny on Adjustable Mortgage Rates

Many people are unaware that taking on an adjustable mortgage rate can significantly lower mortgage rates. These loans, otherwise known as ARMs, are basically special types of mortgage loans. Often, homeowners can find lower rates on mortgage payments in the beginning years of their loans.

Fixed Rate vs. Adjustable Rate Mortgages
Most mortgages operate as fixed rate mortgages. This means the interest rate stays the same for the duration of the mortgage. You’ll pay the same amount every month on your premium, unless you refinance or pay off your loans early.

The interest rates on ARMs will change depending on prevailing interest rates. Many adjustable rate mortgages are tied to the LIBOR index, the Treasury Securities Index, the Cost of Funds Index, or a variety of other indexes.

Term Fluctuation
Your rate will adjust depending on the terms of your adjustable rate mortgage. These rates are adjustable every six months, every year, or even every several years.  Adjustable rates are usually good for people who are paying off a condo or a short term home.

A Good Short Term Option
Remember that adjustable rates will benefit you in the short term, but if interest rates rise, you could end up paying more than you bargained for.

Analyze all your options to determine if a fixed rate mortgage or an adjustable rate mortgage would be better for you.

For Better Interest, Choose Savings Bonds Over Traditional Savings Rates

If you’re earning around one percent interest in savings rates, you may want to put your money where it will grow more powerfully. Savings bonds are conservative investments that pay good interest rates. Read on to learn more about savings bonds and how they can help you increase your assets.

What Are Savings Bonds?
The federal government of the United States issues several interest-bearing bonds that are referred to as savings bonds. These bonds are non-transferable when you purchase them, and are tied directly to the competitive marketplace of governmental finances.

You will often be able to purchase savings bonds at a far lower price than their face value. This is partially what allows them to accrue interest over time. Since these investments are linked to debt and finance obligations that governments carry, they usually come with very little risk. You can invest in savings bonds knowing that your money will be safe.

Watch the Interest Rate Environment
You will notice a fluctuating and vacillating rate of return on savings bonds. These rates fluctuate based on the interest rate environment. Inflation also has a powerful effect on the rates of return of savings bonds.

You may not know this, but the American government initially created savings bonds to help finance expenses that came about as a result of World War I. Generally, investors can purchase two types of savings bonds: Series EE or Series I bonds. Series EE bonds will pay a rate that is equivalent to 90% of the average yield on five year Treasury securities over the past six months, although this rate will fluctuate.  Some bonds will also offer a fixed interest rate.

The Federal Reserve’s website will present a table of prevailing interest rates. You will notice that these rates are very competitive when it comes to safe investments. Sure, you won’t get the returns that you might get when investing in high-risk stocks, but with bonds, you don’t have to trade in too much security. Your investment will be largely safe.

Tax Benefits of Savings Bonds
Also, savings bonds are subject to a variety of tax benefits. First of all, you won’t be required to pay periodic interest subject to income tax. You can actually wait until you cash in the bonds and then report the income you have made. This reduces the amount of income tax you have to pay.

You can also exclude the income you earn from savings bonds if you use the earnings to pay for higher education. The federal government does establish certain regulations that pertain to income limits and types of expenses.

The income earned from savings bonds is not subject to local and state income taxes. You get to keep the bulk of what you earn from savings bonds.

The Risks Are Low
You also minimize your risk, because the default risk on savings bonds is very small. This is due to the fact that they are backed by the full faith and credit of the U.S. government.

Remember, you can’t cash in savings bonds within six months, or sometimes 1 year, of the date which the bond was issued. However, once you do redeem your bond, you’ll gain a significant amount of profit from the accrued interest.

Always try to wait to cash in your savings bond until five years have elapsed, and you won’t have to pay a penalty.

Savings bonds are great low-risk investments that pay off fantastically for most investors.

Dissect Credit Card Offers with a Metaphorical Scalpel

While most credit card offers come from legitimate credit card companies, it’s extremely important to watch out for fraud. By following a few important guidelines, you can distinguish between fraudulent and genuine credit card offers.

Avoid Pre-Approved Cards and Hidden Fees
First of all, be sure you read the fine print. Don’t be seduced by pre-approved cards, and make sure you’re fully aware of the interest rate you’re paying. Also, make sure you know if any ‘teasers’ will increase after a certain period of time. You should also investigate any hidden fees.

Shop Around
Always compare interest rates. You have a right to select the card that best suits your needs. There are a plethora of different cards out there, and they each have perks and disadvantages. Choose a card that has rewards that you’ll actually be able to use.
Never, ever pay fees up front to acquire your credit card. No legitimate credit card company will ever require you to pay anything up front to obtain your credit card. Also, stay away from ‘credit consultants’ that try to help you get a credit card.

The Benefits of Special Types of Credit Cards
Sometimes it’s a good idea to acquire a special type of credit card, such as a secured credit card, prepaid credit card, or premium credit card. You may have special financial needs that require you to place a deposit on whatever card you are using. Don’t consider this a disadvantage. Rather, you should use this as an opportunity to build credit.

If you’re able to successfully manage one credit card, then you’ll be able to increase your credit so that later on you can qualify for a mortgage or some other purchase that requires good credit.

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