HOUSTON — Rising mortgage rates are getting a lot of attention these days. But with the federal reserve raising rates to fend off inflation, it’s taking a toll even if you are not buying a home.
It's not just home mortgage rates spiking this spring.
Have a revolving credit card balance? Thinking of buying a new or used car? Or are you hoping to take out a college loan soon?
Bankrate.com says average credit card rates are at a two-year high of 16 percent. The average 5-year car loan is now over 6 percent. A 20-year home equity loan? Six percent.
And that all-important 30-year mortgage is now over 5 percent, as high as 5.5 percent in some areas, which can add $500 a month to a $350,000 home.
But from the 'doesn't that stink file?', a poor credit score can really hurt you these days.
Buying a car? Your rate can range from 4 percent with an excellent credit score – above 600 – to 17 percent if you have poor credit.
Mortgages and other loans carry similar penalties for low credit scores.
What can you do? Ask about an adjustable rate, or ARM, if you are buying a home, usually a point or two lower than the fixed rate.
Just know it typically readjusts higher in 3 to 5 years so may only be a smart idea if you think you will move in a few years.
Finally, credit counselors say now is good time to try to boost your credit score by paying down credit cards so you get a better rate and don’t waste your money.