What I’ve Been Up To

This Week In Your Wallet: Interest Rates And What They Mean For You

Are you thinking about buying a home — or refinancing the one you have? It’s getting more expensive. Since Election Day, average rates for a 30-year, fixed-rate mortgage have spiked more than half a point — to 4.18 percent last Wednesday. That’s still historically low, but, as The Wall Street Journal reported, it’s the highest rates have been since June 2015.  The upshot: The Mortgage Bankers Association estimates refis will fall 46 percent next year.

As for buyers (first time or subsequent), the impact isn’t as clear. What we do know is that many buyers are hurrying to lock in their rates before they go up even more. Here’s what to keep in mind: In the long term, rising rates usually make houses less affordable — new home prices already hit new heights in September. As CNBC reports, some analysts are looking for that growth to slow and the seller’s market to shift toward buyers in the coming year.

Interest Rates For Your Other Loans

Mortgage rates have moved, as they often do, ahead of action by the Federal Reserve. But, with Fed Chair Janet Yellen signaling that a short-term interest rate hike is likely in the offing in December (with others likely to follow), rates will also start to climb on car loans, credit cards, home equity loans and lines and the like. Here’s what you’re looking at:

Rates on credit cards and HELOCS move in lockstep with the Federal Reserve’s changes to the Fed Funds Rate. When one goes up, the other almost immediately follows (you’ll see the change in your HELOC rate within a couple of billing cycles). But, as WalletHub CEO Odysseas Papadimitriou told the WSJ, credit card rats are also tied to the margin lenders impose over the Federal Funds Rate. Recession fears or the lack of a clear plan for dealing with financial regulation could cause card issuers to increase those margins, he explained.  In the student loan market, the biggest impact will be felt by private loan borrowers; rates on federal student loans won’t change again until next May (and those will be fore the 2017-18 school year.) As for auto loans, there are so many manufacturer-offered incentives in the prices, it’s tough to say. Your best bet when shopping for a new car is to be flexible enough to capture the best deals in financing as well as on the car itself.

How To Stay Safe Using Instant Payment Apps

Finally, let’s switch gears and talk about the dos and don’ts of instant payment apps like Venmo and Zelle. They’re used to pay people back instantly for purchases, whether you’re tossing your coworker a few bucks for the pizza she bought (because you ate a slice) or splitting the utility bill with your roomate. Millennials are six times more likely than boomers and Gen Xers to use payment service Venmo instead cash, checks and credit cards to straighten out the bill, according to research by Qualtrics and Accel. But here’s the kicker: Although 21 percent of consumers have used a mobile app to make a payment, only 11 percent trust that alternative payment providers will protect that flow of money. What you should know is that the most popular mobile payment apps have sound backing — Venmo is owned by PayPal, and Zelle is backed by banks including Chase, Citi and Bank of America.

How do you keep your information — and cash — safe? By immediately freezing or terminating your account remotely if you lose your phone — you can do this by logging in to the app’s website on your computer. Don’t use the same password as another account, especially a financial one, and say yes to multi- or two-factor authentication (meaning you’ll receive security codes via text to log in).

Have a great week,

Jean