The recent announcement that President Biden will not be running for re-election in 2024 has shifted the spotlight to Vice President Kamala Harris. A recent story by the WSJ delves into the way she manages her finances, shedding light on her preference for index funds and her remarkably low mortgage rate of 2.625%. Let’s take a closer look at Harris’ financial decisions and what they reveal.
Kamala seems to really love the 7-Year ARM:
- Harris holds a 7-year adjustable-rate mortgage at a rate of 2.625%
- This type of mortgage offers 84 months of rate stability before adjusting
- Harris secured this mortgage in 2020 with an interest rate fixed until 2027, for a loan between $1,000,000 and $5,000,000
Harris’ Financial Moves Over the Years:
- Harris previously had a 7-year ARM at a rate of 2.625% in 2016 from Wells Fargo
- Another 7/1 ARM in 2012 had an even lower rate of 2.5%
- Based on her past timing, she may face challenges with rising rates in 2027
The Strategy of Refinancing ARMs:
- ARMs can be cheaper than fixed-rate mortgages
- Refinancing before adjustment gives homeowners the benefit of lower rates without the risk
- Refinancing can lead to smaller payments over time through a new loan term
Looking Ahead:
- Harris may see her mortgage rate jump to 4.625% in 2027
- Caps limit how much the rate can increase with each adjustment
- The risk of ARMs lies in future rate hikes and adjustments
As Harris prepares for her mortgage rate adjustment in 2027, the choices she makes will have significant financial implications. While the path ahead may present challenges, understanding her options and being prepared for potential rate increases will be key in navigating this financial decision.
Leave feedback about this