Tag Archives: Interest Rates

Two Neat Charts, History of Interest Rates, and Debt, for a Lighter than Normal Pre-Thanksgiving Week

In a quest for postable animated charts (coming soon – these are REALLY fun) the following two charts grabbed attention on a Pre-Thanksgiving lighter week…. from our friends at Visual Capitalist.

Next week we will bring an animation chart to your inbox – again, they are really neat!

Interest Rates Since 1350

We crow frequently about Interest Rates, as they are very important.

Stepping back to see the forest for the trees…. this chart caught our eyes…

interest-rates-history

Location of Debt

From above, we see the long history of interest rates… below is the location

Pay particular attention to the color and the legend at the bottom of the chart as it is more important than the size of debt as focused on by the chart!

world-debt-2019

We just could not pass these up!

Have a Great “History of Rates and Location” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Q 4 2019 Newsletter Video Audio Podcast Review By John Kvale

Welcome to our Video and Audio Podcast Review of our Q 4 2019 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.

Click Here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page

Let’s get going!

Q 4 2019 Newsletter

Click for PDF/printable version of Newsletter

 

And here is your review!

Is it Time to Refinance?

With Mortgage rates moving lower, we discuss the major items to think of when refinancing your Mortgage.

Our most clever point is we like to have an 18 month payback for the costs when refinancing… this serves as a good barometer on when to refinance, irrespective of the size of your Mortgage.

 

30 Year US Avg Mortgage Rate

 

Tariff Talk

It’s been going on for a long time

Trade Wars AKA Tariff talks have been around for a long time. This is not our first rodeo… notice how trade has been more efficient over time!

 

us-trade-wars-history Cropped

End of Year Tax Reminders

While there are a lot of reach back tax items i.e. Things we can do next year for this years taxes… there are many that have a firm year end deadline-

  • RMD – Required Minimum Distributions
  • Company Related Retirement plans i.e. 401k
  • Charitable Donations
  • 529 and other education programs

We hope you enjoy … talk to you in ….. 2020 WOOOW !!!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

FED lowers again …. but only (.25%) – Longer Term View – Friday

Last Wednesday the FOMC (Federal Open Market Committee) led by Jerome Powell and attended by Dallas’ own Robert Kaplan, lowered rates by .25% to 1.75 to 2.00% Range…

FOMC Lowers rates once again

With a ton of information coming at you (Newsletter is full of interest rate talk) we will keep this short…

The FOMC lowered rates a second time, making for an unofficial change in this cycle from raising to lowering of rates….

FOMC Rate now

While the chart above may seem extreme … let’s look longer term….

FOMC MAX RAte

It’s ok… a .25% move is not that much, but we really would like room to lower when the inevitable recession comes…. who knows, if the tariff talks get fixed, raising of rates may be in the cards…. wouldn’t that be an interesting turn of events… hand tight, we have your back!

Today is a wet Friday, enjoy your weekend and grab that umbrella.

Have a Great “Interesting Rate Cycle” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Lower Rates MAY Have Created an Opportunity … Refinance that Mortgage? – Here’s Some Tips

As mentioned Friday, with an inverted yield curve, mostly caused by longer term rates being lower than short, an opportunity MAY have been created….

We are going to put this in the Newsletter with more details, so please do not take this as an “ok” to run out and start refinancing, there likely is no hurry AND its a big decision…..

Mortgage Rates are Low Again

This chart is the Average 30 year rate across the US –

30 Year US Avg Mortgage Rate

Here are a few points and rules we like to think about when considering a refinance:

  • Think 18 months cost break even – We like to have the saving from the refinance cover the cost of the refinance within 18 months – i.e. Person with $30k mortgage at 5% probably would not need to refinance to 4%, but a $3 million mortgage may be smart to refinance from 4.25% to 4% or the like, if the numbers work out.
  • Resetting Term – Remember if you reset your term, you are extending the treadmill – You may consider paying extra after the refinance to keep on prior term if desired.
  • Planning on staying – It makes no sense what so ever to refinance if you are planning on moving in the next couple of years – life’s curve balls always happen, but if you are planning to move, likely pass on the refinance.
  • 30 Year Fixed Mortgage is our favorite as you can accelerate your term by paying extra, but a 15 year had its merits too, especially if the rate is greatly different – we are not big fans of Variable rate loans.
  • Closing Costs- keep low as possible- This will make your payback faster, easier and also give you the opportunity to refinance again in the future without angst.
  • Buying down points to lower rates – We are not fans of buying down the rate – Ultimately this increases your closing costs and extends the break even analysis from above – If you did on the last mortgage, review where you are and make sure you are out of your break even period before refinancing again.
  • Ancillary fees – It’s a complicated transaction and there are costs associated with it, deservingly so, but try to keep costs down so as to once again keep your break even period short.
  • PMI – Private Mortgage Insurance – Stay away from this if at all possible. This insurance is a cost to you and does nothing for you as the owner/loan holder.
  • Deductibility of cost – Some costs may be deductible, consider costs that are deductible for taxes over costs that are not – With changing tax laws, expect confusion on this point.
  • Avoid teasers – If you google mortgage rates you will get some outlandish offers, if it sounds too good to be true, it is, there is always a catch. Don’t bite on something that is way different than the others.
  • Careful with Hard Credit Reports – Once you lock in on a decision, avoid running multiple Hard/thorough credit reports (these are needed for mortgages) as duplicate checks will lower your credit score.

Have a Great “Possible Refinance Mortgage” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Inverted Yield Curve Update … Current Expansion Speed Reminder … An Opportunity Created ? …

Maybe an over crow of the Inverted Yield curve … but take a look at it’s predictive nature for a recession – darkened areas are recessions:

9-3-19 three month less 10 year fred graph

In case (very likely) you are looking at this post on your cell … at the far right of the above chart, the line dips below zero – this means that that 90 day FOMC/rate is higher than the 10 year treasury – YEP that’s inverted and as far as we can see …  a predictor of a recession –

DON’T JUMP YET!

Recessions come in all forms, and by definition is two consecutive quarters of negative GDP (Gross Domestic Production) –

Remember how slow our recovery has been? This is that last 70 years of expansions, the weakly line on the lower right is our current – yea, its longer, but slower and weaker than all of the others, maybe even the “Runt” recovery compared to all the others …. from our Friends and JPMorgan as of 9-1-19!

9-1-19 last 70 Years of Expansion - JPMorgan

Can a car that is going slow, really crash hard? Hmmmm…

All of this has also created an opportunity — tease, tease, tease….

Have a Great Friday, talk to you next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Our First Accidental Post in almost 2000, the Perils of Bad Wifi Connections – All Eyes on the FOMC next week – Friday

On Wednesday at 9:23 AM, just over an hour before the regularly scheduled 10:30 am post was to go — a quick review of the 10:30 post led to an update from the Ipad which had saved data on the device and then updated it when the review occurred… and some how sent the following title …

img_4065

If you saw it and wondered… now you know – for the record first time in almost 2000 posts now! Of course some have gone off at 10:30 pm rather than am and earlier than planned – but this was the first totally unplanned post – sorry for the confusion, if it caused any! I like to think of it as authenticity 😀

FOMC in View

Next week the FOMC (Federal Open Market Committee) let by Jerome Powell and attended by our on local Dallas President, Robert Kaplan – (our newly admired local president) better lower rates!

It’s hard to feel like they must lower rates as the global economy is slowing but not falling off a cliff …. Their (FOMC) public rhetoric has led Market Participants to be almost certain they are going to lower. If they don’t lower rates – disappointment!

Should be interesting!

Have a GREAT Friday and a Super Weekend – talk to you next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents