Go Banking Rates

New efforts from the Feds to help aid the ailing housing market have helped lower the rate on all mortgage rates to their lowest points in a year. Just a few weeks ago, first-time homebuyers with excellent credit were paying over a 6% interest rate for a 30-year fixed rate loan. According to Freddie Mac, the rate is a low 5.53% and still sliding. Consumers can save tens of thousands of dollars by refinancing, getting more home for their money and should entice first-time buyers.

The trend started last week when the Feds announced their plans to purchase billions of securities from Fannie, Freddie and Ginnie Mae. The slide continued today after several sources reported that the Treasury Department is investigating a plan to drive down mortgage rates as low as 4.5%.

Right now the majority of consumers taking advantage of this change are credit-worthy consumers searching for refinancing deals. Just last week, overall mortgage applications doubled. However, the refinancing traffic tripled and accounted for close to 70% of the mortgage applications, according to the Mortgage Bankers Associations weekly survey.

However, the long-term goal is to get banks back to the business of lending and consumers back to spending. With the huge quantities of available properties, more affordable housing prices and a new standard Good Faith Estimate (GFE) practice sheet initiated by the US Department of Housing and Urban Development, the tides have certainly turned for those interested in taking the big leap.

The positive effects directly related to the government efforts will still take a period of time to manifest. Both home buying and refinancing periods are time consuming and will experience a bit of a slow down due to the upcoming banking holidays.

As the grip of the financial crisis tightens, credit-card delinquencies are on the rise. To protect themselves against risky credit holders, companies are focusing their efforts on closing inactive accounts. That can be bad news for cardholders. Along with the noticed decrease in direct mail credit card solicitations, credit card holders who havent used their plastic for a period of time may notice an increase in account termination letters.

For years consumers have been advised not to cancel inactive credit cards for the fear that the move would inadvertently have a negative affect on their credit score. Kiplinger.com reports that, There are two key reasons why closing old credit-card accounts can hurt your credit score: The move affects your credit utilization ratio and your credit history.

Credit lines may be closed for inactivity if the account holder is considered unprofitable. As with any business, there are associated costs with issuing credit cards and credit issuers have their eye on the bottom line. Additionally bank regulators have just suggested new rules for more restrictions on the credit card industry at large. The possible revisions of cardholders being granted more time before an account is tagged past due and limiting the raises in interest rates could cost the issuers a pretty penny.

If consumers are concerned about having their credit card account closed, the old adage of use it or lose it holds their best defense. Take that dust- or ice-covered emergency card from the secret hiding place and monthly make a small purchase (i.e. a movie ticket, a gallon of milk, etc.). The key is to make sure to PAY OFF THE BALANCE IN FULL BY THE DUE DATE. Not only will this help ensure the current account is active, but by showing financial responsibility of this nature, your credit score could begin to inch upwards.

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