What interest rate cut means for real estate, car loans and debt

Welcome back this morning on today's consumer going to focus on that much anticipated news from the Federal Reserve, cutting its key interest rate by half a point and that means getting it's getting less expensive for consumers to borrow money, let's get a closer look at the impact on our wallets, we've got nbc's at Vicky when high Vicky let's start with the housing market so how is it going to affect you okay, here's the thing we waited for a very long time good things finally came to those who wait, but the rates fall so much slower than they go up so zooming out let's look at the 30 year fixed rate right now 6.15% so what the Fed does it's a benchmark rate, it doesn't directly set mortgage rates, but it does have a major influence. But look at what's happened since 2021 the same time September rates were 3% the next year they jumped to 6% double so last year in October by the way it was 8% we're kissing 8% so now at 6% that's helpful. Everyone was anticipating this rate cut but Fannie Mae and Freddie Mac the 2 financial institutions are predicting that by the end of next year will be down to 5.7% that doesn't sound like amazing, but the Fed chair has said he doesn't think we're going to see 3% ever again so if you are in the market for House, here's what you should be doing right now number one making sure you do everything to improve your credit score that means paying down high interest loans, making sure you're not opening any new credit card getting all your financial paperwork in order. Also hiring a really experienced real estate agent who knows the market because guess what the inventory is still low so competition is going to be fierce. You want to make sure when you make an offer you are as competitive as you got to be so that's if you're looking to buy a House what about let's see that locked into one of those industries where it was north of 6%. Is this the time to refi or the Fed meets again in a few months, I expect to perhaps cut rates again should you wait. So the experts say it's so tempting to try and refinance right now, but you're absolutely right the Fed will meet again in November after the election and in December they're projecting another half point cut. So if you can wait even into early next year. They say go ahead and wait because here's the thing refinancing isn't free right. So here's what you want to think about number one would you refinance to a new rate that's one to 2% lower than what you're paying okay, maybe think about it refinancing cost 2 to 6% of the new loan amount sure the lenders going to say we'll roll it into your monthly payment, you have to pay it all up front, but you've got to do the math look at the monthly payment and see now you're extending your loan longer will the savings outweigh the cost all right, let's talk car loans I know a lot of people in the market for a car so what we be doing this weekend should be looking shopping for cars. Yeah, just last week we're talking about how car prices are falling that is great news. The meat of the average price for a new car $47,000 but the median price is much lower depending on what kind of car you're shopping for a used car average price $27,000 so that's fantastic incentives are back inventories back the loan rates won't fall as quickly, you know because it takes a little bit of time for all this to trickle down the average rate for a new car loan right now 7% according to Edmonds 11% for a used car. But here's the thing you don't have to accept the loan that's offered to you at the dealership go to your bank go to your credit union and if you are a veteran usaa has new car loans starting at 4.4 9% the low rate so if you have excellent credit you could get an even better rate you usually get a better rate at a at a versus at the dealerships that you're going to depend on the car that you're shopping for what kind of incentives that dealers offering and if you have excellent credit some dealers are offering rates as low as 0 to 2%. Credit card that over the last few years Americans erected nearly a trillion dollars in credit card that what is the Fed's decision yesterday mean for folks trying to pay down the balance eventually it's going to be great news, but we have seen credit card interest rates hit record highs over the last couple of years right now they're sitting around 23% for a new credit card this is according to wallet have 21% for an existing credit card. Think about that means if you spend a $100 and you don't pay it off right away, you $123 yeah, that's financial quicksand don't get into credit card debt in the first place, but if you are pay off your high interest cards first that is number one. Here's what can help you transferring all of that debt to a new credit card for a year a lot of credit cards will offer you 0% interest if you can't get one of those deals go to the bank and ask for a personal loan a lot of times those interest rates are much much lower you use that personal loan you pay off all your credit card debt and then you chip away at that personal loan, but it's so important to want to be 23% interest, nobody and then my favorite tip always negotiate here's the thing you don't. I believe the car dealers hate to see you. I bought all the cars, my family and I do all over the Internet. That's a whole nother segment. But here's the thing you call up your credit card number that 800 number on the back and you say hey listen can you please give me a lower interest rate and you know what it works 76% of the time lending tree did a study they said when you ask you shall receive by the way if you hold a phone like this. I like in my air pods and yeah, just is there anything we should keep in mind that we talk about the credit card debt and what a financial like sand trap that really is but I also think we're going into the holidays and as many great deals as you're going to see don't overspend for the holidays don't put it all on your credit card there is nothing like being debt free that is the best gift of all save more than you spend that makes you just more competitive than all of the other things the big good debt that you want like housing debt or a card that right student loans that he would love that always brings the good always brings all right, thank you for that.