Rising Rates Put Squeeze on Variable Mortgages; Financial Advisors Recommend Careful Planning Over Panic
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Their variable-rate loan payments jumped from $1,200-$1,600 to $5,000 per month due to rising interest rates. They are reluctant to liquidate investments to pay it off.
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Paying off the loan by selling investments could leave them house rich but cash poor if rates fall again.
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Trying for a cash-out mortgage has downsides with current high rates. Selling the home may be overreacting if they can still afford it.
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Seeking advice from a fiduciary financial advisor could help make an informed decision on what to do.
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Gifting stock to a child transfers the giver's cost basis. The child owes capital gains taxes when the stock is sold.