Gerri Willis Commentary:
Top Tips by Gerri Willis Column archive
How the Fed affects your wallet
What you need to know about home loans and savings accounts.
By Gerri Willis, CNN

NEW YORK (CNNMoney.com) -- The Fed met Wednesday and held interest rates steady - significant given the two years of consecutive rate hikes.

Most economists don't see the Fed cutting rates until at least March of next year. These economists also anticipate just one rate cut for 2007. And considering the Fed has been raising rates since 2004, this is good news for people who borrow money.

Mortgage Rates
30 yr fixed 4.32%
15 yr fixed 3.36%
5/1 ARM 3.37%
30 yr refi 4.31%
15 yr refi 3.34%

Find personalized rates:
 

Rates provided by Bankrate.com.

In today's top tips we'll tell you what it means to your wallet.

1: Analyze your ARM

If you have an adjustable rate mortgage, you want to do some analysis now. With adjustable rate mortgages, you have a fixed interest rate for a set amount of time. But when that time is up, you're rate resets to whatever the current interest rate is. And that could mean a hundreds of dollars more in your monthly payments.

If you have a one, three or six month ARM, it's likely your interest rates have adjusted higher already and you're paying interest in the low 7 percent range. If these monthly payments are too painful for your budget, you'll want to refinance into a 30 year fixed mortgage.

But remember, you've endured the worst of the Fed's rate raising campaign, so if you can hold on for another 6 months, you'll be able to take advantage of a rate cut, when the 30 year fixed mortgage rate will be even lower.

Remember not all ARMS are created equal - if you took out a 5 or 7 year hybrid arm, you're not facing a rate change until at least 2009, so you can sit tight and wait for rates to move lower.

2: Get a better loan

If you have a home equity line of credit, you've already taken quite a beating. Rates have been going higher for as long as the fed has been raising rates. But there is hope. You can refi your HELOC. Pull out your paperwork and determine your rate. If your rate is at the prime rate plus half a percentage point or even a full percentage point over prime, you'll want to get a different HELOC.

The marketplace is very competitive and you don't even have to wait for the Fed to slash rates. Look for Heloc's at prime or at Prime minus a quarter percentage point. Of course you should make sure there are no termination clauses on your original HELOC. You don't want to be stuck paying fees or a percentage of the loan amount.

3: Lock in CD rates now

Lower interest rates may be good news for borrowers, but they're not good for savers. If rates go down, the rate on CDs go down too. So take advantage of the opportunity to lock in rates now, says Greg McBride of Bankrate.com.

Locking in a 6 month or a one year CD will give you an average interest rate of almost 5 percent. That rate is even better than the averages on a 5 year CD. Go to bankrate.com to compare.

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Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to toptips@cnn.com or click here - each week, we'll answer questions on CNN, Headline News and CNNMoney.com.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.