than half a percentage point in six weeks. the rates went up very dramatically. they went up very quickly. reporter: ironically, an improving economy is to blame. unemployment is down. the stock market is doing really well. medium home prices are up. people are feeling better. they re out there buying again. so the economy does well, you will see a rising rate environment. reporter: and you will see it in your monthly payment. at 3.5% on a $250,000 home with 20% down, you pay about $898. the same 30-year fixed mortgage will cost you 954 bucks at 4%. that s $56 more a month or $672 a year. down payment, credit score, and income determine the rate you ll pay. borrowers that are getting the best rate are putting 20% to 25% down. they have income that is documentable so they re providing w-2s and federal tax returns, and they have an excellent credit score. something over 700 or 720. reporter: a quick closing date also helps. you get your best rate from a
actually got help. do we want to go this and do a government program, yet again, to prop up housing? why think is. now, if the banks want to sit down and, say, it is good business to take care of our good discussing, to talk with the customers, and help them, but the idea for the government to force banker to change contract, i don t think that is wise. neil: and the government is not forcing them to roll become the principle and i can understand that, and they are just say, all right, a lot of people do not refinance as you bring up, simply because they are underwater and they can t, they would love to but they want, what if the banks are saying, with the low rate environment, we will let you refinance at the lower rates,
on earlier, your warm-up act, and he was saying i m buying citigroup and bank of america, they have been beaten down enough they have to be great guys. guest: i think it is a huge mistake. the market is, with all due respect to donald trump, the market is a lot smarter than him at this point. and, again, average bear markets go down about 25 percent on the dow, and 35 percent open the nasdaq and i don t think we are there yet and the way this is acting right now, it is vicious, and it reminds me of bad bear market and i hope i m wrong, but, all evidence in now is very worrisome and i think we will see it soon because things are much quicker than they used to be. neil: there is a flip side to the low rate environment, mortgages have never, ever been cheaper but the only problem is they have never been harder to
can take advantage of the currency fluctuations, they might have corporate bonds, floating bonds and floating rate loans which reset in an upward environment and let your interest rate go up. so it allows you to take advantage of a rising rate environment. what this will allow you to do, if you re in a treasury fund and treasuries are going to go down, you can t do anything. this type of fund and all the fund families have this type of fund and it gives the manager the opportunity to bump out of treasuries and into something else and take advantage of a rising rate environment. it s a more moderate rate to do this. the strategic income fund i fsicx, it can be in a bunch of other things. you re turning over the daily management of someone else who is looking at this every day to try to keep you and move you at the right time.
bank account or cd or money market, something paying low interest, this is a slightly better insurance policy. slightly better if you hold it to maturity, that s true. what people at medium risk. what would do you there? really, there are a lot of opportunities. we keep hearing how bonds are going to be terrible in a rising rate environment. people are talking most about treasury bonds, perhaps even municipal bonds. if you go to a flexible income fund or strategic income fund, you re going to bring in additional opportunities. they could have treasuries in here, and you could have a spot where quantitative easing quantitative easing is throwing in money to keep interest rates down. and there s going to be one more. eventually they re going to come down in terms of value as the rates go up. so the manager in this not only has treasuries in here, but they might have global bonds, which