When Britain voted to leave the European Union, markets all over the world took an immediate hit. Chaos ensued and people all over the world weren’t sure what to expect next.
However, after a few short days things started to calm down and lucrative opportunities started to come to the forefront. Here are just two of the many ways homeowners and investors can profit from the Brexit crisis.
#1 – Refinance Your Mortgage
Immediately after the vote came down, the yield on the benchmark 10-year Treasury dropped to 1.44%. That’s the lowest it has been in four years. This of course is good news for homeowners all over the world. With lower borrowing costs, now is the perfect time to refinance your mortgage.
According to Zillow.com, refinancing right now has the potential to save you up to $600 a month on a $300,000 30 year mortgage that was taken out in 2010. Please note refinancing is not for everyone. You should only refinance your home if you can lower your interest rate by 0.75-percentage point, and if you plan on staying in the home for at least 5 more years. Otherwise it won’t be worth it as the fees will far outweigh the benefits.
Keep in mind there are also costs associated with a no cash refinance. For instance, your mortgage may be reset to 30 years.
#2 – Reorganize Your Portfolio
Another way you can profit from the Brexit crisis is by reorganizing your portfolio. This is especially true for long term investors. The fear created by Britain leaving the European Union caused stocks to fall more than 5% in just 48 hours.
As a result scared investors started selling off their stocks as quickly as possible. That opened the door for savvy investors to snatch up a ton of suddenly cheap stocks.
Big financial institutions such as JPMorgan Chase and Wells Fargo were impacted the most by the sell-off. Both however are well diversified banks and will have no problem bouncing back.
As billionaire investor Warren Buffet once said, “Be fearful when others are greedy and greedy when others are fearful.” Right now is the time to be greedy. The Brexit crisis has opened up a value buying opportunity most are too afraid to act on.
Right now, given the right set of circumstances, you can greatly enhance your returns by making a few minor adjustments to your portfolio.