When the Federal Reserve meets, we all have questions: What does it mean to me? Will my mortgage rate go up or down? Is this a good time to refinance? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at mortgages:

Mortgages

Winner: Home shoppers

Hardly a week passes without new predictions of impending economic disaster in the United States.

However, all that gloom and doom obscures one bright spot: Now may be a great time to buy a house.

“Values are incredible right now,” says David Kuiper, a mortgage planner at First Place Bank in Holland, Mich. “Buyers have a lot of inventory at very attractive prices to choose from.”

Sinking mortgage rates and new tax incentives for first-time buyers (such as a tax credit of up to 10 percent of a home’s purchase price, up to $7,500) are additional sweeteners that make the prospect of buying a home irresistible for some.

If you have sound finances, a secure job and an extended time horizon, it may be time to call a real estate agent.

Winner: Homeowners hoping to refinance

In January, mortgage rates fell to multi-decade lows before rising the next month. Ever since that time, homeowners have waited vain for rates to fall again.

Until now.

The Nov. 25 announcement that the Federal Reserve would buy up to $500 billion of securitized loans caused mortgage rates to plunge. In recent weeks, they have hovered near 45-year lows, making now a great time to lock into a mortgage rate.

Some homeowners likely will continue to hold out for even lower rates. But that could be a mistake. “The risks of rates increasing far outweigh the chance that rates will go lower,” Kuiper says. “If it makes sense today, go for it.”

Loser: Homeowners in special circumstances

Although mortgage rates are sinking, certain groups of homeowners hoping to refinance may be on the outside looking in.

Homeowners who are under water on their mortgages or who have credit scores under 680 are likely to have a very difficult time refinancing, says Dan Green, a Certified Mortgage Planner based in Cincinnati who works for the Mobium Mortgage Group.

As credit continues to tighten, refinancing prospects will dim for homeowners whose monthly debts exceed 45 percent of their income and homeowners hoping to refinance investment properties.

“Low mortgage rates are terrific, but they’re available to a dramatically shrinking number of homeowners across the country,” says Green, who is also author of TheMortgageReports.com.

Take action

In recent months, sinking home prices have made housing increasingly affordable for shoppers.

Now, falling mortgage rates are adding extra incentive to secure a new mortgage.

Whether you’re looking to buy a new home or to refinance an existing loan, this is a great time to lock into mortgage rates that are near 45-year lows.

— Chris Kissell

Home Equity

Winner: HELOC borrowers

The Federal Reserve’s latest rate cut will make it even cheaper to borrow funds through a home equity line of credit. In addition, HELOC borrowing costs are tax-deductible.

The combination of lower interest rates and tax-deductibility makes HELOCs among the most attractive forms of credit in the current marketplace.

Many lenders are moving to freeze access to HELOCs as economic conditions deteriorate. But borrowers who escape this fate are likely to enjoy rock-bottom borrowing costs until the Fed starts raising rates again.

Loser: Home equity loan shoppers

Fed rate decisions do not directly impact the direction of home equity loan rates. However, in recent weeks, loan rates have soared to their highest levels since 2002.

If you are shopping for a home equity loan, you will almost certainly pay north of 8 percent for the privilege of borrowing at a fixed rate.

As HELOC rates drop in coming weeks, the spread between HELOCs and home equity loans could easily top 3 percentage points.

Take action

The Federal Reserve’s decision to cut the federal funds rate by at least 75 basis points means borrowing costs on home equity lines of credit will continue to plunge.

Rates on home equity loans have been soaring lately, and are unlikely to move dramatically based on the Fed’s most recent action.

If you have access to the home equity line of credit, it is likely to offer your best bet for borrowing at the lowest rate possible. Just remember that failure to make your monthly HELOC payment can put your home at risk. So, borrow prudently.

If you don’t have access to a HELOC, you may have to wait a long time before the opportunity to borrow comes around again. But it will arrive eventually.

“We’re probably closer to the bottom of it than we’ve been in a long time,” says Bob Walters, chief economist at Quicken Loans.

After all, he adds, “you can’t have negative lending.”

— Chris Kissell

CDs and MMAs

Loser: CD buyers

Savers must have been bad all year, because Santa just tossed another chunk of coal in their stockings. No real surprise, though.

Ben Bernanke and the rest of the Federal Open Market Committee still have some wiggle room to take short-term rates even lower. This is the tenth meeting in a row that they’ve lowered rates, and we have no reason to expect anything different in January. The next scheduled meeting is Jan. 27-28.

At the top of this article it says CD buyers are losers. That’s just Bankrate’s format — if rates drop, CD buyers lose. The real losers are people who are buying Treasuries that sport an interest rate of zero. People who are buying high-yield CDs are winners. Amen.

We’ll look at high-yield CDs in the Smart Money Moves section of this report, but there are other ways you can raise some cash.

John Sestina, a Certified Financial Planner in Columbus, Ohio, says this is a great opportunity for people who are paying attention.

“Recover some extra cash by refinancing, not just your mortgage but also your car loan,” says Sestina. “Consider juggling medical and other expenses (between this year and next year). Some people could opt for the standard deduction this year and push all the individual deductions into next year. The extra cash flow can be used to buy mutual funds or add money to a retirement plan. Sooner or later the market will come back.”

Take action:

Probably the best thing you can do in an economy like this is be proactive. Review your loans and see if refinancing is an option. Even if you’ve always done your own tax return, this may be the year to hand it over to a pro to make sure you get every break you deserve. And, of course, make sure your cash is working hard and not sitting around earning a measly 0.25 percent.

— Laura Bruce

Auto

Winner: Auto loan shoppers with good credit
Loser: Auto loan shoppers with poor credit

Borrowers hoping for a rock-bottom rate on an auto loan as a result of the Federal Open Market Committee cutting the federal funds rate by at least 75 basis points today may find themselves disappointed. Auto loan interest rates probably won’t budge.

“Auto loan rates don’t move around a whole lot, particularly those offered by banks and credit unions,” says Greg McBride, senior financial analyst at Bankrate.com.

“When the Fed cut rates from 5 percent to 4 percent, that was more significant to the rates that borrowers were seeing than it will be when the Fed cuts the federal funds rate below the 1 percent mark,” he says.

Plus, the credit crunch has settled in for the winter. For borrowers, that means easy financing is out, good credit scores and large down payments are in. That trend is unlikely to change in the near future.

“The tighter underwriting guidelines are here to stay for the foreseeable future; we’re not going back to the days when any body that could fog a mirror could get a loan,” says McBride.

Borrowers with good credit and a sizable down payment won’t find the actions take by the Federal Open Market Committee much help on the interest rate front, but financing is still available.

Those with poor credit, on the other hand, may have some trouble getting a bank to lend them money.

According to Mike Celuch, chief financial officer of Paragon Federal Credit Union, credit scores somewhere below the lower 600s on the FICO scale may find themselves shut out — or, in the best case, saddled with a high interest rate.

“I think it’s going to be a function of the rate and so forth — they may be able to qualify below that, but what kind of rate they’ll get depends,” Celuch says.

Still, shoppers with good credit scores shouldn’t have a problem. “In the mid-700s they should be fine,” he says.

Take action

Take serious steps to clean up your credit if financing a car may be in your future. That includes paying down debt and fixing mistakes on your credit report. Lenders are scrutinizing shoppers’ debt-to-income ratios much more closely than in the past few years. With unemployment figures rising and consumer confidence plummeting, banks are wary of lending to borrowers who may not be able to repay.

“The lending business has generally tightened their standards, so I think people with weaker credit are at greater risk of not even being able to secure a loan today than they were many months ago or a year ago. I don’t see that changing anytime soon,” says Gary Miller, CEO of FirstAgain.com.

— Sheyna Steiner

Credit Cards

Winner: Credit card debtors

The Federal Open Market Committee chopped the benchmark federal funds target rate 75 basis points to a quarter of a percent, from 1 percent. As a result, the prime rate will sink to 3.25 percent, a low not seen since the 1950s.

Most variable-rate cards are tied to the movement of the prime rate. A lower prime rate could spell good news for credit card shoppers. “Anytime the Fed takes a cut like that, it should have a positive effect on the advertised rates for variable-rate cards,” says Bill Hardekopf, CEO of LowCards.com.

While some rates could come down on variable-rate card offers, existing variable-rate cardholders may or may not see their rate decrease. It depends on your credit and the terms of your account, as well as how the bank is managing its card portfolio. “I would suspect that the vast majority of folks out there are not going to see the benefit. You’re still going to see a significant number of consumers that will benefit, but I think most won’t,” says Curtis Arnold, founder of CardRatings.com and author of “How You Can Profit from Credit Cards.”

Arnold says that if your card is still pegged to the prime rate, if it doesn’t have a floor and if the issuer hasn’t switched you to a fixed-rate product, then you might see your APR decrease. He cautions, however, that any rate decrease may be short-lived if your risk changes. Banks are lowering limits, raising rates, closing accounts and applying fees to those deemed high risk or unprofitable.

Take action

Bring up your credit score to keep lenders at bay. Reduce debt, send payments on time and use sock-drawer cards every six months to keep the accounts open. Avoid closing accounts unless they present a spending temptation or charge fees. Canceling a card will never raise your credit score.

Read more about who wins or loses by clicking on the tabs at the top of this story.

— Leslie McFadden

When the Federal Reserve meets, we all have questions: What does it mean to me? Will my HELOC rate go up or down? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at home equity loans:

Winner: HELOC borrowers

The Federal Reserve’s latest rate cut will make it even cheaper to borrow funds through a home equity line of credit. In addition, HELOC borrowing costs are tax-deductible.

The combination of lower interest rates and tax-deductibility makes HELOCs among the most attractive forms of credit in the current marketplace.

Many lenders are moving to freeze access to HELOCs as economic conditions deteriorate. But borrowers who escape this fate are likely to enjoy rock-bottom borrowing costs until the Fed starts raising rates again.

Loser: Home equity loan shoppers

Fed rate decisions do not directly impact the direction of home equity loan rates. However, in recent weeks, loan rates have soared to their highest levels since 2002.

If you are shopping for a home equity loan, you will almost certainly pay north of 8 percent for the privilege of borrowing at a fixed rate.

As HELOC rates drop in coming weeks, the spread between HELOCs and home equity loans could easily top 3 percentage points.

Take action

The Federal Reserve’s decision to cut the federal funds rate by at least 75 basis points means borrowing costs on home equity lines of credit will continue to plunge.

Rates on home equity loans have been soaring lately, and are unlikely to move dramatically based on the Fed’s most recent action.

If you have access to the home equity line of credit, it is likely to offer your best bet for borrowing at the lowest rate possible. Just remember that failure to make your monthly HELOC payment can put your home at risk. So, borrow prudently.

If you don’t have access to a HELOC, you may have to wait a long time before the opportunity to borrow comes around again. But it will arrive eventually.

“We’re probably closer to the bottom of it than we’ve been in a long time,” says Bob Walters, chief economist at Quicken Loans.

After all, he adds, “you can’t have negative lending.”

When the Federal Reserve changes rates, we all have questions: What does it mean to me? Will yields on certificates of deposit go up or down? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at CDs and money market accounts:

Loser: CD buyers

Savers must have been bad all year, because Santa just tossed another chunk of coal in their stockings. No real surprise, though.

Ben Bernanke and the rest of the Federal Open Market Committee still have some wiggle room to take short-term rates even lower. This is the tenth meeting in a row that they’ve lowered rates, and we have no reason to expect anything different in January. The next scheduled meeting is Jan. 27-28.

At the top of this article it says CD buyers are losers. That’s just Bankrate’s format — if rates drop, CD buyers lose. The real losers are people who are buying Treasuries that sport an interest rate of zero. People who are buying high-yield CDs are winners. Amen.

We’ll look at high-yield CDs in the Smart Money Moves section of this report, but there are other ways you can raise some cash.

John Sestina, a Certified Financial Planner in Columbus, Ohio, says this is a great opportunity for people who are paying attention.

“Recover some extra cash by refinancing, not just your mortgage but also your car loan,” says Sestina. “Consider juggling medical and other expenses (between this year and next year). Some people could opt for the standard deduction this year and push all the individual deductions into next year. The extra cash flow can be used to buy mutual funds or add money to a retirement plan. Sooner or later the market will come back.”

Take action:

Probably the best thing you can do in an economy like this is be proactive. Review your loans and see if refinancing is an option. Even if you’ve always done your own tax return, this may be the year to hand it over to a pro to make sure you get every break you deserve. And, of course, make sure your cash is working hard and not sitting around earning a measly 0.25 percent.

When the Federal Reserve meets, we all have questions: What does it mean to me? Will I be able to get a cheaper car loan when I replace my clunker? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at auto loans:

Winner: Auto loan shoppers with good credit

Loser: Auto loan shoppers with poor credit
Borrowers hoping for a rock-bottom rate on an auto loan as a result of the Federal Open Market Committee cutting the federal funds rate by at least 75 basis points today may find themselves disappointed. Auto loan interest rates probably won’t budge.

“Auto loan rates don’t move around a whole lot, particularly those offered by banks and credit unions,” says Greg McBride, senior financial analyst at Bankrate.com.

“When the Fed cut rates from 5 percent to 4 percent, that was more significant to the rates that borrowers were seeing than it will be when the Fed cuts the federal funds rate below the 1 percent mark,” he says.

Plus, the credit crunch has settled in for the winter. For borrowers, that means easy financing is out, good credit scores and large down payments are in. That trend is unlikely to change in the near future.

“The tighter underwriting guidelines are here to stay for the foreseeable future; we’re not going back to the days when any body that could fog a mirror could get a loan,” says McBride.

Borrowers with good credit and a sizable down payment won’t find the actions take by the Federal Open Market Committee much help on the interest rate front, but financing is still available.

Those with poor credit, on the other hand, may have some trouble getting a bank to lend them money.

According to Mike Celuch, chief financial officer of Paragon Federal Credit Union, credit scores somewhere below the lower 600s on the FICO scale may find themselves shut out — or, in the best case, saddled with a high interest rate.

“I think it’s going to be a function of the rate and so forth — they may be able to qualify below that, but what kind of rate they’ll get depends,” Celuch says.

Still, shoppers with good credit scores shouldn’t have a problem. “In the mid-700s they should be fine,” he says.

Take action

Take serious steps to clean up your credit if financing a car may be in your future. That includes paying down debt and fixing mistakes on your credit report. Lenders are scrutinizing shoppers’ debt-to-income ratios much more closely than in the past few years. With unemployment figures rising and consumer confidence plummeting, banks are wary of lending to borrowers who may not be able to repay.

“The lending business has generally tightened their standards, so I think people with weaker credit are at greater risk of not even being able to secure a loan today than they were many months ago or a year ago. I don’t see that changing anytime soon,” says Gary Miller, CEO of FirstAgain.com.

When the Federal Reserve meets, we all have questions: What does it mean to me? Is my credit card company going to sock me with another rate increase? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at credit cards:

Winner: Credit card debtors

The Federal Open Market Committee chopped the benchmark federal funds target rate 75 basis points to a quarter of a percent, from 1 percent. As a result, the prime rate will sink to 3.25 percent, a low not seen since the 1950s.

Most variable-rate cards are tied to the movement of the prime rate. A lower prime rate could spell good news for credit card shoppers. “Anytime the Fed takes a cut like that, it should have a positive effect on the advertised rates for variable-rate cards,” says Bill Hardekopf, CEO of LowCards.com.

While some rates could come down on variable-rate card offers, existing variable-rate cardholders may or may not see their rate decrease. It depends on your credit and the terms of your account, as well as how the bank is managing its card portfolio. “I would suspect that the vast majority of folks out there are not going to see the benefit. You’re still going to see a significant number of consumers that will benefit, but I think most won’t,” says Curtis Arnold, founder of CardRatings.com and author of “How You Can Profit from Credit Cards.”

Arnold says that if your card is still pegged to the prime rate, if it doesn’t have a floor and if the issuer hasn’t switched you to a fixed-rate product, then you might see your APR decrease. He cautions, however, that any rate decrease may be short-lived if your risk changes. Banks are lowering limits, raising rates, closing accounts and applying fees to those deemed high risk or unprofitable.

Take action

Bring up your credit score to keep lenders at bay. Reduce debt, send payments on time and use sock-drawer cards every six months to keep the accounts open. Avoid closing accounts unless they present a spending temptation or charge fees. Canceling a card will never raise your credit score.

Read more about who wins or loses by clicking on the tabs at the top of this story.