Hi Lisa, my advice to you is to refinance and lock in your rate now. I know you are considering downsizing, but I do not think it is worth the risk in case your situation changes and you either decide to stay in the home or have difficulty selling it. Rates on 30-year fixed mortgages are still very attractive and are considerably lower than where they were just one year ago. The rate on a 30-year fixed mortgage is around 6.2 percent, whereas 20 years ago the same mortgage was 10.5 percent.
Also, do not be shy in trying to negotiate some of the closing costs with your mortgage lender. If your credit is excellent, you are likely a good candidate and may be able to shave some fees off your closing. So, take advantage of the rates and security a fixed mortgage provides.
As a 61-year-old single woman currently on disability — I am also concerned about my 401(k), which has dropped about $65,000 this year. Since I don't have many years before retirement (I may or may not be able to return to work) I wonder whether I should move more of my mutual fund elections into Treasury or money market funds. I only have about 25 percent there now. The rest is in a variety of stock funds -- domestic and international. Do I just hold on, or should I move everything or more of it to the less speculative Treasuries, etc? I would like to wait and try to recoup some of my losses but am concerned about losing much more.
Also,how do you find a good financial advisor now -- if you have no additional funds to invest but are simply concerned with the 401(k) choices? Does it make sense to consult a fee-only specialist now?
From: Naomi A, Ronkonkoma, N.Y.
Given the volatile markets, your concerns are valid! In your case, I do think it would be worthwhile for you to consider working with a fee-based financial planner. Two of the organizations I recommend are: The Garrett Planning Network, Inc. or Cambridge Advisors, Inc.
Garrett provides fee-only financial planning services and investment advice to people of all backgrounds and income levels. Similarly, Cambridge has a network of advisors across 25 states catering to clients of all levels of wealth. Both of these organizations are excellent starting points to locate a professional whose focus and expertis will match your needs.
Regardless of whether you choose to work with a financial advisor or not, you are not hiring out your thinking. You need to make a commitment to learning about your finances so you can have informed discussions with your advisor. When selecting an advisor who suits your needs, be sure to choose someone willing to take the time to educate you.
I am very confused and don't know what to do with my finances. However, I am taking your advice somewhat and leaving my money in the bank, but it's just sitting in a checking account. I have about $350.00 a month that I am able to save and not touch, but what do I do with it; how do I increase my savings — what should I do with my money?
From: Tina Gunnin, Chandler, Ariz.
My recommendation for you is to set up an automatic investment plan into a mutual fund. Instead of putting all $350 in a checking account, consider putting half or even $200 of the money into a stock mutual fund every month. Once you start investing, keep at it.