10 November 2018
Question: According to MSN: Money, what are eight (8) ways to battle rising mortgage rates?
Sell-off drives oil into bear territory after US presses allies to boost output – Pg. 1
– …Brent crude below $70 a barrel yesterday, a 20% drop on the four-year highs the international benchmark just hit a month ago
– The sharp sell-off, which pushed oil into bear market territory, has been exacerbated by a White House decision to grant waivers to US sanctions that allow Iran’s largest importers, including China, India and Japan, to continue buying crude from the Islamic republic
– Donald Trump, the US president, has pressed the Saudis and other Gulf producers to pump flat out to help replace Iranian supplies. The falling prices will be taken in Washington as a victory
Amazon HQ2 talks are ‘stamp of approval’ for New York tech scene – Pg. 14
– Although Amazon has not finalized its plans, several people familiar with its deliberations expect Long Island City – along with Crystal City in northern Virginia – to be crowned joint winners as early as this week after an unusual nationwide beauty pageant
– In just a few years, a rustling Queens Manhattan has been transformed: Long Island City has built 16,800 apartment units since 2006 – more than any other US city – and has another 11,700 expected to open by 2020
– Amazon’s arrival would be overwhelming popular with one constituency: New York developers, who stand to reap a windfall
Demand for US debt drives strongest weekly fund inflows in four months – Pg. 15
– Global fixed income funds enjoyed their strongest inflows in four months over the past week, showing how bond investors are tiptoeing back into the market after rising interest rates triggered an exodus in October
– Signs of some tentative stability have begun to lure investors back. The Bloomberg Barclays Aggregate, the biggest US fixed income gauge, is still nursing a 2.5% loss for the year – which would be the biggest annual reversal since 1994 – but has seen a small bound since the beginning of November
– Benchmark US government bond yields remain near multiyear highs – the 10-year Treasury yield stands at 3.23%, the highest since 2011 – but the recent midterm elections have calmed concerns that another republican sweep could trigger more deficit-busting tax cuts
– The Fed held interest rates steady on Thursday but did nothing to dissuade traders from pricing in another rate increase next month. It also continues to shrink its balance sheet
Answer: (1) Make a bigger down payment (Prof Note: Live with parents/in laws or with lots of roommates and save. Forgot consumption. SAVE!); (2) Pay Points; (3) Equity sharing (Prof Note: Do you really want partners?); (4) Switch loan products (Prof Note: This is REALLY dangerous. You MUST understand your loan product completely. I am proud to say, “I wrote the book on Real Estate Financial Modelling”, and I continue to learn every day. I see cost of money differently (slightly) each day. Be careful to understand how/what one is borrowing); (5) Shorter Terms (Prof Note: What I like the most of 15-year CPM mortgages, is that at current rates one is always paying Main Street more than Wall Street); (6) Downsize expectations (Prof Note: Happiness is between the walls of a house. Forgo some size, add some minutes to the commute, all for less stress and increased happiness between the walls); (7) Buy with friends or relatives; (8) Bring a renter (Prof Note: This is dangerous. You must underwrite to no renters and then view the renter as “upside”)