Down for the Count

June 1, 1996

NORTH PALM BEACH, Fla.---Even though interest rates are at their lowest in nearly two years, buydown mortgages are growing more popular with lenders and borrowers, according to Bank Rate Monitor, a company that tracks and publishes financial information.

The company and the banking industry report that with this trend increasing, American Savings, a Stockton, Calif., savings and loan, is now offering two formulas for loans. Both feature low start-up interest rates that increase to market levels, usually over three or four years.

With the one formula, American provides for the seller, real estate salesperson, or builder to pay buydown points. With the other formula, American itself pays the points.

Bank Rate Monitor also reports that more lenders are offering no-fee deals to borrowers with little up-front cash. It means borrowers don't have to come up with the same amount of cash they might have had to two years ago. However, Bank Rate Monitor notes that lenders aren't necessarily being generous but just refiguring the points and will charge a rate high enough so that the loan itself absorbs all the expenses of getting a mortgage.

Source: IRED News/ALQ-Real Estate Intelligence Report

Procrastination Carries a Price

NEWARK,N.J.---Think waiting a year to start saving for retirement won't make a big difference in the size of the pot you have when you hang up your skates at 65? For an eye-opener, stop at this cool Web site by The Prudential Insurance Co.

Click on Retirement Planning. That will take you to the Cost of Waiting Calculator. Type in how much you want to save, the anticipated interest rate you'll get, and the number of years until retirement.

Here's an example: If you're 30 and start saving $200 per month at 8 percent interest and increase your investing by 5 percent annually, you'll have $741,546 by age 65.

Procrastinate for a year, and you'll end up with $674,943. Wait five years, and you'll have only $459,257.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.