In Your 50s? Take Advantage of Low Interest

BOSTON (TheStreet) -- The older I get, the more I relate to the saying, "The more things change, the more they stay the same." Just a few years ago, for example, the news dominating the headlines was Elliot Spitzer's political scandal. Fast forward and the only thing that seems to have changed is the name of the politician in the hot seat, from Spitzer to Schwarzenegger to Edwards to U.S. Rep. Anthony Weiner.

On the economic front, we've also gone through our share of headline-making stories since 2008, but one story that hasn't changed is the historically low-interest-rate environment. While another political scandal may not be worthy of further commentary, the recent news that the Fed could initiate another round of interest rates cuts merits some attention.

Federal Reserve Chairman Ben Bernanke says interest rates may remain near zero. There are ways to take advantage of these interest doldrums.

Federal Reserve Chairman Ben Bernanke acknowledged last week that the slower economic recovery in the U.S. could lead to an extension of monetary policies to help stimulate growth, such as holding interest rates near zero. Given this environment of slower-paced growth and low interest rates, what financial strategies make sense? Are there still ways people, particularly those in their 50s or older, could "make lemons into lemonade," and turn what seems to be dour economic conditions to their advantage?

One of the most obvious options to consider is refinancing a home. Even if one refinanced a few years ago, it may be worth going through the process again and potentially getting a loan with a lower rate and shorter term. The general rule of thumb is that refinancing makes sense if you can secure a loan at least 1% lower than your current mortgage. Administrative fees and other closing costs could run a few thousand dollars, so make sure you take those expenses into consideration when making the final decision. A good resource for mortgage calculators and other tips on borrowing is The Mortgage Professor.

Many people fortunate enough to have cash reserves beyond their emergency fund often contemplate whether they should use those funds to pay off their mortgage. These days, when even the most ardent interest rate shopper would be pressed to find a money market fund or short-term CD earning much more than 1%, it's possible that redirecting those savings to pay the remaining balance on a loan may be the most financial sense. By doing so, you may save thousands of dollars of interest-rate payments over your lifetime.