Friday Financial Five – March 14th, 2014
Friday, March 14, 2014
Britain anticipates rapid interest rate increase
Britain’s economy has become the envy of the developed world, with anticipated growth of over 3 percent in the first half of 2014. The Governor of the Bank of England forecasts an increase to rates by as much as six times the current rate in the next three years. This increase would benefit savers, while also assuredly motivating homebuyers to purchase real estate sooner rather than later. Those holding variable rate loans will try to lock in a lower fixed rate. It’s an enviable state of affairs, but one that the U.S. can’t hope to replicate until growth expands and employment stabilizes.
Social Security options may be limited
Social Security’s viability rests on the government’s ability to properly manage inflows and outflows. The inflows are more or less predictable based on the workforce and wages, but the outflows can fluctuate depending on retirees’ choices of when to receive benefits. People, as they often do, will attempt to maximize income to the extent possible. With that in mind, part of the recent 2015 budget proposal intends to eliminate “aggressive Social Security claiming strategies”. It isn’t clear exactly what options are being targeted, but it stands to reason that higher income retirees and spousal benefits are under the microscope. This leads to another question as to what changes can be made with or without the approval of Congress.
Fannie and Freddie get hit hard
Congress did Fannie Mae and Freddie Mac stockholders no favors this week. Shares are off big following Tuesday’s announcement by the Senate Banking Committee that they intend to phase the mortgage lenders out. There is no timeline for the changes and a vote isn’t even expected this year. However, there is a firm commitment by Congress to remove government from the mortgage business as much as possible. The current proposal would create a Federal Mortgage Insurance Corp, an oversight body modeled after the FDIC.
Higher deductibles a definite trend
The trend toward higher deductible health plans has been confirmed in a new study by Mercer LLC. Roughly 80 percent of companies have made a change to their health plan or are considering making a shift. This includes many that have concerns that “Cadillac Plans” may result in a hefty tax for what are considered overly generous benefits. Workers that have moved to higher deductible plans must keep an eye out for any co-pays after the deductible is met. This can lead to yearly out-of-pocket expenses much greater than the actual plan deductible.
Payday loan practices under CFPB scrutiny
The Consumer Financial Protection Bureau continues active involvement in the practice of “payday loans”. These loans involve borrowers taking out small loans against the promise of repayment when a future paycheck arrives. The loans have high interest rates and detractors fear the practice places low income borrowers in a never-ending cycle of debt. At the end of 2013, the CFPB recovered $14 million from Cash America International. Now, companies that use or sell internet data to connect lenders and borrowers are under the microscope. Expect some future settlements.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
Related Slideshow: 10 Great MA Houses That Just Came on the Market—March 13, 2014
10 Hawthorne Ave.
2 beds, 1 bath
A rare and unique opportunity to become a part of this very special community. Walk to the beach, restaurants, 4th of July parades, Falmouth Fireworks annual display, Falmouth Road Race finish line, join FMC for children's sports/activities and adult socials, Falmouth Yacht Club, Falmouth Harbor, and town close by. This home will be sold as is, and located just six homes from the Falmouth Heights Beach.
6 Warner Ln.
3 beds, 1 bath
Detached condo that feels like a single family home without the maintenance has been completely renovated from top to bottom that feels like a single family home without the maintenance. New 2014 energy star windows worth over $10k. Both bathrooms have been fully renovated with new cabinets and plumbing fixtures. New interior and exterior doors complete with new hardware. New carpeting, tile and bamboo wood flooring. Newly expanded kitchen design with new cabinets, stainless energy star appliances and granite countertop. New kitchen sink and faucet. Master bedroom has a large walk in closet. New lighting. New baseboard heating. Freshly painted and new trim work around windows, doors and baseboard installed. Even the front door is new! Close to Route 2. This home is move in ready. Enjoy a maintenance free lifestyle!
9 Greenleaf Dr.
3 beds, 1 bath
Your chance to get a great deal on a great home in a great neighborhood! St. John's Prep is just a stones throw away! Perfect Multi-level home with hardwood floors throughout. Open spacious living room, dining room, and family rooms, fireplace, updated heating system, garage with plenty of storage above and the house has a number of bonus rooms in the lower levels of the multi leveled basement. Enjoy the convince of a community swimming pool for your neighborhood just down the street. Professionally landscaped multilevel yard. Come and check out the best deal in the are and put your finishing touches on the home of your dreams in Danvers's most desirable neighborhood!
3 beds, 2 baths
Bird's eye view of New Braintree and views east. Get away from it all on this private 13 acre estate with a spectacular view from every window and balcony, 4000 sf of living area, large office / entertainment room on third floor. In 2006 a major addition was added to the original 175 yr old hunting lodge to create a one of a kind home. Set well off the beaten path, this home would be an ideal vacation home or year round residence. Seller will consider rental call for details.
29 Shattuck Rd.
4 beds, 3 baths
Handsome... Stately, Colonial. This 3,700 Sqft. home features: four large bedrooms, including master bedroom suite, formal dining room, Family room with vaulted ceiling, remodeled gourmet eat in kitchen, and a first floor office/den, 512 Sqft. Finished third level, over sized three car garage,and professionally landscaped yard. Conveniently located to the Amherst, Northampton areas.
89 Oxbow Rd.
3 beds, 2 baths
This property is located in a fantastic commuter location yet offers a nice private lot. Beautiful stone fireplace in both the living room and finished lower level. You'll find plenty of room for everyone in the family in this over-sized split, offering 3 bedrooms, 2 baths, eat in kitchen, finished lower level with family room & office currently used as an additional bedroom. Bring your decorating ideas and make this property yours.
221 Coy Hill Rd.
3 beds, 1 bath
Beautiful country setting, close to the Mass Pike, just 35 minutes from Springfield. Cheerful, open floor plan between living room with fireplace and breakfast area. The kitchen includes a gas range, refrigerator, garbage disposal, and oak cabinets. The kitchen has a dual entrance to the formal dining room and breakfast area. Large bedrooms upstairs and partially finished basement. For convenience the large turn-around driveway makes for easy entrance and exit onto quiet country road.
202 Silver St.
3 beds, 2 baths
Privately tucked back off the road and set comfortably into the wooded bliss of Silver St. You won't hear much more than the chipping of birds and rustling of leaves this fall as you enjoy your almost 3 acres of backyard. Everyone in the family including your Pets will find this area fun and relaxing - hurry home from a day at work to light the grill or eat inside and enjoy your working kitchen / snack at the center island or formally dine beneath the cathedral ceiling - this totally open floor plan is fabulous, you'll see! Down the hall is the spacious MBedroom with superior MBath. Pocket door/pedestal sink/dual shower with seats...walk right in!! The phone will be ringing with activity so call soon to get a private viewing! Look for the sign out front and then look no further....
25 School St.
2 beds, 1 bath
This Charming Cape is situated on .37 acres of land on a quiet dead end street, near the center of town. Recently renovated this 2 bedroom home offers an open floor plan, sunroom, fireplace, an upgraded kitchen and more. Walking distance to the town library, ball fields, and hiking trails. If you are a first time home buyer or looking to downsize to 'first floor' living, this home is ideal. Close to all major routes and the bus line.
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