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CNN Live Today
Top Five Tips for Borrowers, Buyers, Owners, Savers, Investors
Aired June 27, 2003 - 10:24 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, ANCHOR: To the big board now, the New York Stock Exchange. Looking at the Dow Jones Industrial Averages, down about 15 or so, sitting at 9063. We'll keep our eye on that for you. Maybe it will get up in the positive numbers. You never know.
In our daily segment on personal finance now, we've been talking about the fed's cut in interest rates and what it means for you. Gerri Willis, personal finance editor at CNN financial news, is back again with today's top five tips.
Hello to you, Gerri. You have all kinds of info here today for buyers, owners, borrowers, savers and investors. So that pretty much hits everybody.
Let's talk about home buyers. What should they be doing?
GERRI WILLIS, CNN FINANCIAL NEWS: Well, you've got to lock in now if you're thinking about a home mortgage.
Look, a surprising thing happened Wednesday after the fed dropped interest rates. Mortgages started going up. Lenders put on an extra eighth of point and the experts now say that mortgage rates are going to go up rather than down. So lock that rate in now and think twice before you get an adjustable rate loan with the expectations that rates could rise over the summer and into the fall.
COOLINS: Yes. If only we had a crystal ball you'd know which way to go on that. But that's a great idea.
Homeowners, thinking about a home equity loan, that's the way they should be going now?
WILLIS: Yes. You know, home equity loans, their interest rate is fixed. Home equity lines of credit usually have a lower rate but they're variable. If rates rise, you're going to pay the price.
If you already have a home equity line of credit, you're probably see in your next statement, July, that the rate has gone below five percent. That's very good news.
But if you're getting a new one, you might want to think about the home equity loan.
COLLINS: And for borrowers, consider getting a fixed rate card. OK, what's that?
WILLIS: If you've got a lot of credit card debt and you've got a variable rate card, you've probably seen your rate drop a little bit here. But you know, they have a floor that they don't go below. And at this point because rates would appear, according to the experts, to be bottoming, you might want to get a fixed rate card and get the rate that's out there today. It's about a little in the excess of 13 percent, Heidi.
COLLINS: And for savers, what should they be thinking about these days?
WILLIS: Well, you know, I've talked a lot about money market mutual funds. Their returns have gone down, down, down. They're now about a half a percentage point. If you take into consideration the fees they're also charging you for those things, you're making nothing.
So you might want to consider, instead, even a passbook savings account at the local bank may pay more. Consider that. Shop around for a better money market mutual fund at iMoneyNet.com. That's a great place to go.
COLLINS: Good. So you can do some comparing on that.
Now what about for investors, don't invest? What do they do at this point?
WILLIS: Well, I think you go long-term time horizon. Look, go for it. And there are a lot of things out now that are providing great return as dividends that you might want to think about. Think about those dividend paying stocks.
And also think about REITs. I don't know if you're familiar with this, but these are real estate investment trusts. They invest in real estate. We know what's been going on there. And they have an average yield of six percent. Now how does that compare to your money market fund?
Now naturally, these are more volatile overall, but the dividend returns are pretty attractive. And when you consider that the taxes have changed on this, making them even more attractive, it's something worth considering.
COLLINS: Yes. So much to be talking about in the real estate area.
Thanks so much, Gerri Willis, for your five top tips today. Helps out a lot.
WILLIS: Thank you, Heidi.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Investors>
Aired June 27, 2003 - 10:24 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, ANCHOR: To the big board now, the New York Stock Exchange. Looking at the Dow Jones Industrial Averages, down about 15 or so, sitting at 9063. We'll keep our eye on that for you. Maybe it will get up in the positive numbers. You never know.
In our daily segment on personal finance now, we've been talking about the fed's cut in interest rates and what it means for you. Gerri Willis, personal finance editor at CNN financial news, is back again with today's top five tips.
Hello to you, Gerri. You have all kinds of info here today for buyers, owners, borrowers, savers and investors. So that pretty much hits everybody.
Let's talk about home buyers. What should they be doing?
GERRI WILLIS, CNN FINANCIAL NEWS: Well, you've got to lock in now if you're thinking about a home mortgage.
Look, a surprising thing happened Wednesday after the fed dropped interest rates. Mortgages started going up. Lenders put on an extra eighth of point and the experts now say that mortgage rates are going to go up rather than down. So lock that rate in now and think twice before you get an adjustable rate loan with the expectations that rates could rise over the summer and into the fall.
COOLINS: Yes. If only we had a crystal ball you'd know which way to go on that. But that's a great idea.
Homeowners, thinking about a home equity loan, that's the way they should be going now?
WILLIS: Yes. You know, home equity loans, their interest rate is fixed. Home equity lines of credit usually have a lower rate but they're variable. If rates rise, you're going to pay the price.
If you already have a home equity line of credit, you're probably see in your next statement, July, that the rate has gone below five percent. That's very good news.
But if you're getting a new one, you might want to think about the home equity loan.
COLLINS: And for borrowers, consider getting a fixed rate card. OK, what's that?
WILLIS: If you've got a lot of credit card debt and you've got a variable rate card, you've probably seen your rate drop a little bit here. But you know, they have a floor that they don't go below. And at this point because rates would appear, according to the experts, to be bottoming, you might want to get a fixed rate card and get the rate that's out there today. It's about a little in the excess of 13 percent, Heidi.
COLLINS: And for savers, what should they be thinking about these days?
WILLIS: Well, you know, I've talked a lot about money market mutual funds. Their returns have gone down, down, down. They're now about a half a percentage point. If you take into consideration the fees they're also charging you for those things, you're making nothing.
So you might want to consider, instead, even a passbook savings account at the local bank may pay more. Consider that. Shop around for a better money market mutual fund at iMoneyNet.com. That's a great place to go.
COLLINS: Good. So you can do some comparing on that.
Now what about for investors, don't invest? What do they do at this point?
WILLIS: Well, I think you go long-term time horizon. Look, go for it. And there are a lot of things out now that are providing great return as dividends that you might want to think about. Think about those dividend paying stocks.
And also think about REITs. I don't know if you're familiar with this, but these are real estate investment trusts. They invest in real estate. We know what's been going on there. And they have an average yield of six percent. Now how does that compare to your money market fund?
Now naturally, these are more volatile overall, but the dividend returns are pretty attractive. And when you consider that the taxes have changed on this, making them even more attractive, it's something worth considering.
COLLINS: Yes. So much to be talking about in the real estate area.
Thanks so much, Gerri Willis, for your five top tips today. Helps out a lot.
WILLIS: Thank you, Heidi.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Investors>
