Do 15-year mortgages make sense?
Americans’ newfound aversion to borrowing has sparked interest in 15-year fixed-rate mortgages, said Bob Tedeschi in The New York Times. Though monthly payments on these loans can be more than
50 percent higher than on a 30-year mortgage, they are becoming popular among homeowners spooked by long-term debt. Average 15-year rates are about a quarter of a point lower than 30-year rates, and these loans accrue considerably less interest over the life of the loan. “Borrowers, though, may need a strong stomach and much confidence in their employment status to choose a higher monthly payment.” For that reason, most homeowners may be better off locking in a 30-year mortgage that permits them to pay more than the amount due each month, says Bruce Hirschfeld of Montvale Mortgage in Hackensack, N.J. “That way, if they really want, they can pay it off in 15 years, even if it’s at a slightly higher interest rate,” he says.
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Lessons from the bear
It’s only natural to want to forget about the “nausea and depression” you suffered when the stock market hit 12-year lows in March, said Allan Roth in Money. But in fact “now is the perfect time to document what a scary ride you’ve been on, and to preserve those memories for the next bull market.” Doing so can keep you from getting caught up in bullish euphoria—and subsequent bearish pessimism—the next time around. The best way to jog your memory is to keep a diary. “Write down how much your net worth shrank and how it made you feel.” Include a “simple investment policy statement” outlining how you’ll allocate assets over the long term. Then put a copy in an envelope labeled “open when the S&P hits 1,200.”
Dual income, no child care
The “complex dance” of dual-income parents is reaching new extremes, said Sue Shellenbarger in The Wall Street Journal. “Forced by the recession to cut costs while snapping up every opportunity to work, husbands and wives are swapping roles and bending work schedules at levels never seen before.” The shift toward “tag-team” parenting certainly represents a more “equitable” division of child-care responsibilities between mothers and fathers—but it’s not without problems. “Couples are coordinating their calendars down to the minute.” To ease the pain, parents with conflicting work schedules need to “make allowances” for the stress, says Thomas Bradbury, co-director of UCLA’s Relationship Institute. If your partner is struggling, pick up the slack. But don’t “crow about how helpful you are,” Bradbury says. That will only make matters worse.
