An expert with the University of Alabama at Birmingham says interest rates are so low that buying a $1,000 two-month CD from the bank will only earn you 83 cents more than if you buried the same amount in your yard for two months. Andreas Rauterkus, Ph.D., assistant professor of finance with the UAB School of Business, says the best thing to do with your money in 2012 is buy a house.
“First-time home-buyer rates are around 3.8 percent for a 30-year mortgage, so if you can afford a $1,000 mortgage payment monthly for 30 years then you can buy a $250,000 home right now,” says Rauterkus. “It won’t get you much in New York City, but you can get quite a house for that in Birmingham and other affordable areas across the country.”
The biggest mistake people make is not doing their homework, says Lary Cowart, Ph.D., assistant professor of real estate and finance at the UAB School of Business. A certified real estate appraiser, he says the primary change in real estate during recent years is price, which has gone down. Cowart says people will research the obvious factors — school systems, convenience and neighborhood — but ignore details about the property and the transaction that lead to big problems.
“Not enough people take time to study things that will affect the transaction and rely on others to do the homework for them,” says Cowart. “Even smart people can buy a house and not realize it needs work. So suddenly they need $12,000 for a new roof, but they’ve spent all their money buying the house.”
Buyers, especially inexperienced ones, should be prepared to ask the right questions of the owner and every service provider, and to exercise their right to inspect the property thoroughly, he says.
If you qualify for a home loan, Cowart advises against waiting for the house of your dreams to drop in price; once the housing prices hit bottom, interest rates rise. And each time the interest rates rise, you lose money.
“Holding out to try and find the lowest price is not a good strategy because if the house were to go down 10 percent but the interest rate goes up 1 percent you are not gaining anything,” said Cowart. “If rates go up 1 percent, say from 4 to 5 percent, that is a 25 percent increase in the interest rate; so the mortgage payment goes up by more than 10 percent and the amount of house that can be purchased goes down by more than 10 percent. People fail to realize that and it is another little thing that will cost them big over the 30-year life of the loan.”
Kevin Storr | Newswise Science News
Corporate coworking as a driver of innovation
22.11.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)
Tiny pores at a cell's entryway act as miniature bouncers, letting in some electrically charged atoms--ions--but blocking others. Operating as exquisitely sensitive filters, these "ion channels" play a critical role in biological functions such as muscle contraction and the firing of brain cells.
To rapidly transport the right ions through the cell membrane, the tiny channels rely on a complex interplay between the ions and surrounding molecules,...
The miniaturization of the current technology of storage media is hindered by fundamental limits of quantum mechanics. A new approach consists in using so-called spin-crossover molecules as the smallest possible storage unit. Similar to normal hard drives, these special molecules can save information via their magnetic state. A research team from Kiel University has now managed to successfully place a new class of spin-crossover molecules onto a surface and to improve the molecule’s storage capacity. The storage density of conventional hard drives could therefore theoretically be increased by more than one hundred fold. The study has been published in the scientific journal Nano Letters.
Over the past few years, the building blocks of storage media have gotten ever smaller. But further miniaturization of the current technology is hindered by...
With innovative experiments, researchers at the Helmholtz-Zentrums Geesthacht and the Technical University Hamburg unravel why tiny metallic structures are extremely strong
Light-weight and simultaneously strong – porous metallic nanomaterials promise interesting applications as, for instance, for future aeroplanes with enhanced...
An interdisciplinary group of researchers interfaced individual bacteria with a computer to build a hybrid bio-digital circuit - Study published in Nature Communications
Scientists at the Institute of Science and Technology Austria (IST Austria) have managed to control the behavior of individual bacteria by connecting them to a...
Physicists in the Laboratory for Attosecond Physics (run jointly by LMU Munich and the Max Planck Institute for Quantum Optics) have developed an attosecond electron microscope that allows them to visualize the dispersion of light in time and space, and observe the motions of electrons in atoms.
The most basic of all physical interactions in nature is that between light and matter. This interaction takes place in attosecond times (i.e. billionths of a...
08.12.2017 | Event News
07.12.2017 | Event News
05.12.2017 | Event News
11.12.2017 | Physics and Astronomy
11.12.2017 | Materials Sciences
11.12.2017 | Earth Sciences