When my freelance income disappeared in mid-March, I decided to pause many of my bill payments while I figured out my next financial steps. Pausing my utility payments was no problem, and my mortgage, credit card, and car loan companies all offered to pause my payments. Interest would continue to accrue, but eventually negative credit markers and late fees would be removed from my accounts. However, six weeks later, my car company placed a courtesy call to check in on why my bill hadn't been paid — their automated system can't account for all of the anomalies cropping up in the wake of the coronavirus. I'm relying on the social safety net to buy groceries and continue paying my mortgage. I'm still figuring out the rest. Read more personal finance coverage.
Smack dab in the middle of March, as my freelance work ground to an abrupt halt, I chose to put my financial life on hold by pausing many of my bill payments. It was, at the time, an option I thought too good to be true. Six weeks later, the phone rang. "It seems your car payment is 28 days past due," a voice on the other end said in a slight Southern drawl. "And, considering your impeccable payment history, we are reaching out as a courtesy before reporting to the credit bureaus." I gulped. Hard. In retrospect, I'm surprised it took six weeks to get this call; in fact, I was hardly surprised that my car company's promise to waive late fees and cease reporting to credit agencies — one matched by my mortgage lender and credit card company as well — would be impossible to uphold considering the veritable financial tsunami unleashed across America by COVID-19. The type-A me, responsible for the very fact that I do not get calls from bill collectors, would have freaked out; I, on the other hand, simply sighed. "Well," I said as lightheartedly as I could muster, "I figure I won't be the only American whose credit score plummets as a result of this debacle." I was joking, half hoping for reassurance that my theory was valid. "Yes, ma'am," the VW rep replied. "Will that be all?" I woke the next morning with a conundrum of epic proportions on my hands: Do I direct what little cash I have on hand — largely gleaned from my 2019 tax refund plus my stimulus check (which, thankfully, hit my direct deposit on April 15 and totaled $1,700 for me and one dependent child; my ex gets to claim the other) — to my car company, or continue to stockpile these meager funds for groceries and cell phone bills? Pausing my financial life Arriving at an answer required a bit of backtracking. After my kids' schools closed on March 11, and social distancing protocols made doing my freelance work in the community impossible, I began to explore what pausing my financial life might look like. I started with my utilities, where there were (and continue to be) no questions asked with regard to paying current, past, and future bills. Then, I moved onto my credit card company. "Don't sweat it," they said with regard to skipping my minimum monthly payment for up to two months, assuring me that while interest would continue to accrue, late fees and credit markers would be removed after the fact. My car company sent paperwork in the mail (can you even imagine?) to facilitate tacking my March and April payments onto the life of my loan (yay!); needless to say, something must have gotten lost in the mail. Literally. Finally, I mustered the courage to tackle my mortgage, which, like most homeowners, is my largest monthly bill (and includes my property taxes and homeowner's insurance). I was given the option of applying for forbearance — my loan payments would be postponed, but interest would continue to accrue. If the interest is not paid during that period, it could be capitalized, which means it would be added the principal balance of the loan. Ugh. I took this option but could already see what lay ahead: at some point in the not-so-distant future, I was going to owe a giant lump sum. Exploring my options and accessing the social safety net This, I knew, was a short-term option at best; I decided not to be rash and instead explored my options. The CARES Act, which put into place unprecedented benefits for freelance and gig workers like me, has been invaluable. I applied, and was quickly approved, for the Paycheck Protection Program (PPP). As a sole proprietor of my home-based business, it promises to pay two and a half months of my freelance income (based on my previous year's 1099 earnings). While those funds are not yet available, knowing they are coming gives me space to breathe. Massachusetts, where I live and work, became one of the first states in the country to provide financial assistance to those not traditionally eligible for unemployment compensation (read: self-employed and gig workers). It took the state just three weeks to build out an entire website for Pandemic Unemployment Assistance (PUA), and in the first few days of the program launch, the Massachusetts unemployment office had already received over 200,000 PUA applications, among them mine. In the span of just five business days, not only did I apply and get approved for PUA benefits, but six weeks of unemployment benefits were also direct deposited into my checking account. It feels good to know there are safety nets in place, and I am thankful to be benefit ting. Where things stand now: some bills paid, others still on hold Here's my most recent update: Have I caught up with my mortgage payments? Yes. I essentially directed my entire stimulus check (adios creative plans to support local businesses and order take-out from the few restaurants in our area that remain open) plus the first two weeks of PUA I received to clear up that murky mess; it felt like the right thing to do. As far as my car goes, my car company is sending the account to collections because I missed my March and April payments; their system (which is automated) can't catch all the anomalies that are cropping up due to COVID-19. Later, though, they will go in and remove the credit markers and refund late fees. Am I out of the woods? No, not by a long shot. And here's the thing: I remain uncertain as to how quickly I should start shoveling money back into the system, and I'm trying not to be fearful. I suppose there is no other choice than to put one foot in front of the other, begin allocating funds to the most pressing places, and say a silent prayer that life — namely my work life — will be back to normal sooner rather than later. Tuition payments are expected to resume in June, and I'll be poised to pay. As for my daughters' summer camp bills? I think I'll leave those funds in the bank. Just in case life takes longer than I'd like to get back on track.
Read more on managing your money in this tumultuous time: 3 options for people struggling to pay their mortgage during the global health crisis 4 reasons to get disability insurance, even if you don't think you need it If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
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When I was made redundant, I thought I would easily get another great job. Then the...When I was made redundant, I thought I would easily get another great job. Then the pandemic hit …It was while I was on the phone to my closest friend that my world came crashing down. As I distractedly read an email while we chatted, the reality I had been holding at bay with a combination of denial and optimism could no longer be ignored. The bank was letting me know the loan and credit card payment holidays I had taken at the beginning of lockdown were coming to an end.In six weeks I would run out of money. Not just low on money, but out of money, credit and options. No income, no way of paying my bills, no way of buying food, nothing. Continue reading...
The average mortgage interest rate on a 30-year fixed rate loan in the US is...The average mortgage interest rate on a 30-year fixed rate loan in the US is 3.15% as of May 28, 2020. But interest rates vary by person, so that won't necessarily be the mortgage rate you'll see at closing. Your interest rate depends largely on your credit score, the type of home loan you're choosing, and even what's happening in the larger economy. Sign up for Personal Finance Insider's email newsletter here » The average interest rate for the most popular 30-year fixed mortgage is 3.15% as of May 28, 2020, according to data from the Federal Reserve Bank of St. Louis. Mortgage interest rates are always changing, and there are a lot of factors that can sway your interest rate. While some of them are personal factors you have control over, and some aren't, it's important to know what your interest rate could look like as you start the getting a home loan. Table of ContentsAverage mortgage interest rate by type There are several different types of mortgages available, and they generally differ by the loan's length in years, and whether the interest rate is fixed or adjustable. There are three main types: 30-year fixed rate mortgage: The most popular type of mortgage, this home loan makes for low monthly payments by spreading the amount over 30 years. 15-year fixed rate mortgage: Interest rates and payments won't change on this type of loan, but it has higher monthly payments since payments are spread over 15 years. 5/1-year adjustable rate mortgage: Also called a 5/1 ARM, this mortgage has fixed rates for five years, then has an adjustable rate after that. Here's how these three types of mortgage interest rates stack up: Mortgage type 30-year fixed rate mortgage: Average APR 30-year fixed mortgage 3.15% 15-year fixed mortgage 2.62% 5/1-year adjustable rate mortgage 3.13% Average mortgage interest rate by credit score National rates aren't the only thing that can sway your mortgage rates — personal information like your credit history also can affect the price you'll pay to borrow. Your credit score is a number calculated based on your borrowing, credit use, and repayment history, and the score you receive between 300 and 850 acts like a grade point average for how you use credit. You can check your credit score online for free. The higher your score is, the less you'll pay to borrow money. Generally, 620 is the minimum credit score needed to buy a house, with some exceptions for government-backed loans. Data from credit scoring company FICO shows that the lower your credit score, the more you'll pay for credit. Here's the average interest rate by credit level in June 2020: FICO Score National average mortgage APR 620 to 639 4.52% 640 to 659 3.97% 660 to 679 3.54% 680 to 699 3.35% 700 to 759 3.15% 760 to 850 2.93% According to FICO, only people with credit scores above 700 will truly see interest rates at the national average. Average mortgage interest rate by year Mortgage rates are constantly in flux, largely affected by what's happening in the greater economy. Generally, mortgage interest rates move independently and in advance of the federal funds rate, or the amount banks pay to borrow. Things like inflation, the bond market, and the overall housing market conditions can affect the rate you'll see. Here's how the average mortgage interest rate has changed over time, according to data from the Federal Reserve Board of St. Louis: Year Average 30-year fixed mortgage rate (January) 2000 8.15% 2001 7.07% 2002 7.14% 2003 5.85% 2004 5.87% 2005 5.77% 2006 6.15% 2007 6.18% 2008 6.07% 2009 6.01% 2010 5.09% 2011 4.77% 2012 3.87% 2013 3.34% 2014 4.53% 2015 3.73% 2016 3.97% 2017 4.20% 2018 3.99% 2019 4.75% 2020 3.72% Since January 2020, the mortgage rate has fallen drastically in several months due to the economic impact of the coronavirus crisis. By late May 2020, the 30-year fixed mortgage's 3.15% average interest rate has become the lowest seen in many years, even lower than even rates at the depths of the Great Recession. Thirty-year fixed mortgage interest rates hit a low of 3.31% in November 2012, according to data from the Federal Reserve of St. Louis. Average mortgage interest rate by state The state where you're buying your home could influence your interest rate. Interest rates for a 30-year mortgage ranges from 3.18% in Hawaii to 3.76% in Mississippi. Here's the average interest rate by loan type in each state according to data from S&P Global. State 15-Year Fixed 30-Year Fixed 5/1 ARM Alabama 3.04 3.44 3.46 Alaska 2.79 3.27 3.13 Arizona 2.89 3.48 3.38 Arkansas 3.2 3.74 3.56 California 2.88 3.52 3.15 Colorado 2.97 3.51 3.33 Connecticut 2.95 3.41 3.03 Delaware 2.86 3.48 3.08 District of Columbia 2.85 3.4 2.97 Florida 2.81 3.45 3.23 Georgia 2.9 3.53 3.29 Hawaii 2.69 3.18 2.53 Idaho 2.92 3.42 3.27 Illinois 2.91 3.45 3.25 Indiana 2.91 3.38 3.31 Iowa 2.82 3.32 3.34 Kansas 3.13 3.63 3.61 Kentucky 3.02 3.51 3.33 Louisiana 3.1 3.59 3.36 Maine 3.19 3.52 3.49 Maryland 2.78 3.39 3.09 Massachusetts 3.01 3.56 3.55 Michigan 2.99 3.43 3.13 Minnesota 2.89 3.37 3.04 Mississippi 3.42 3.76 3.62 Missouri 3.05 3.57 3.51 Montana 3.18 3.63 3.31 Nebraska 2.98 3.48 3.57 Nevada 2.8 3.43 3.14 New Hampshire 3.02 3.47 3.46 New Jersey 2.87 3.44 3.32 New Mexico 3.06 3.59 3.4 New York 2.96 3.42 3.31 North Carolina 3.07 3.54 3.31 North Dakota 3.15 3.46 3.39 Ohio 2.95 3.39 3.01 Oklahoma 3.13 3.61 3.41 Oregon 2.88 3.48 3.3 Pennsylvania 2.9 3.42 3.43 Rhode Island 2.99 3.56 3.45 South Carolina 2.96 3.54 3.33 South Dakota 3 3.5 3.13 Tennessee 3.18 3.68 3.48 Texas 2.99 3.51 3.54 Utah 2.77 3.33 3.08 Vermont 2.96 3.39 3.1 Virginia 2.94 3.43 3.36 Washington 3 3.44 3.45 West Virginia 3.28 3.7 3.46 Wisconsin 2.97 3.44 3.36 Wyoming 3.15 3.6 3.58 More personal finance coverage 4 reasons to open a high-yield savings account while interest rates are down Here's the average auto loan interest rate by credit score, loan term, and lender The best high-yield savings accounts right now Here are the banks with the best CD rates The best rewards credit cards 7 reasons you may need life insurance, even if you think you don't Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America