Q. I am having a home built and it will be finished in November. I am very concerned that interest rates may rise ...

A. You can always try to refinance for a fixed interest. However, this doesn’t always work to your advantage, as banks try to take advantage of customers.

There is another smart way to do it, if you have an investment portfolio. What you are requesting is done with Forward Rate Agreements or swaps. However, those are available to professional bankers, rather than retail customers. What you can do to manage your interest rate risk is to hedge it by holding an appropriate bond portfolio. If you match the portfolio in the right proportion and rates increase, you would pay more on your loan, but the bonds would also pay a higher yield, so the two would cancel each other.

You can always check us at www.ameri-financial.com if you have sophisticated questions.

And yes, the interest rates are going to rise as the economy recovers.

Good luck!

Moni.

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