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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

226.0. "T-Bill Rate Flux, and Refinancing " by COGITO::LMARCOCCIO () Thu Jun 25 1992 17:38

    We are currently reconsidering refinancing our mortgage, versus
    allowing the ARM to mature and the fixed rate to kick-in. We now have a
    3 year ARM which comes due for adjustment August, 1993. The adjustment
    at that time will be based upon the 3-year T-Bill + 2.75%. 
    
    Herein lies the quandry...if the ARM were adjusted today, the resulting 
    interest rate would be about 8.5% (the bank said the 3-year T-Bill was at
    5.679% currently). If the 3-year T-Bill can remain stable for the next
    year, we would much prefer to not go through the hassle of refinancing
    plus the additional $$ we would need (closing costs etc).
    
    The question I think we need to consider is how will the T-Bill do
    over the next year. What influences a T-Bill rate? I understand the
    T-Bill is a loan to the federal government, and they are fairly low
    right now. However we are in an election year....
    
    Feedback/help much appreciated.
     
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226.1which way the wind blowsPCCAD2::DINGELDEINPHOENIXFri Jun 26 1992 19:4613
    You're asking the million dollar question. Which way are interest rates
    heading? Who knows! One thing I do know is short term rates are very
    low historically and any whiff of inflation or accelerated domestic
    growth will push rates back up again. Long term rates (30 year) are
    also historically low. Anything approaching 8% is good. If you're a
    gambler hang in there, If you need stability lock in a long rate.
    These are very uncertain times and your Q is a tough one.
    P.S. - An election is approaching and volatility may be quite high
           over the next 6 months .
    
    				dan d