3 financial upsides to the Brexit fallout

As the old saying goes, every cloud has a silver lining.

Finding the financial positives in the U.K.'s decision to leave the European Union may prove challenging and not for the faint of heart, but experts say there are some ways that U.S. investors and consumers might come out for the better, although those benefits may be played out over the long term.

U.S. stocks
With the U.S. markets roiled by the U.K.'s decision to leave the union, the downturn provides a good buying opportunity for investors, said Bankrate chief financial officer Greg McBride. Both the S&P 500 and Dow Jones industrials average plunged in early trading on Friday on concern about how the vote will impact global economic growth, yet Brexit -- a mashup of "Britain" and "exit" -- is unlikely to change the fundamental outlook for U.S. stocks, according to UBS Wealth Management, which is predicting that corporate earnings growth will rise in the second half of 2016.

"Today is a great buying opportunity for long-term investors," said McBride. "You are seeing a classic market reaction driven by uncertainty and fear. It's not a reaction based on fundamentals."

The U.S. economy has limited exposure to the U.K., given that American exports to Britain comprise only 0.7 percent of U.S. GDP, according to PNC, which noted that the risks to Americans are "likely to be indirect," such as greater uncertainty and more market volatility.

Even if buying stocks doesn't seem appealing or feasible at the moment, experts say to avoid selling shares in the near-term downturn. "Given considerable uncertainties, we would encourage investors not to sell down risk assets in a time of heightened market volatility and lower-than-average liquidity," Mark Haefele, global chief investment officer at UBS Wealth Management, said in the note.

Mortgages, car loans and credit
Americans may see some upside with lower interest rates, making the summer a prime time to refinance a mortgage, buy a house or car, or take out a loan. The Federal Reserve's Janet Yellen cited the possibility of Brexit as a reason for passing on an interest rate hike at its most recent meeting. Now that the U.K. has voted in favor of leaving the E.U., it's unlikely that the Fed will raise rates in July because of the resulting global economic uncertainty.

"Mortgage rates are going to tumble today," McBride said. "They may set new record lows, but borrowers shouldn't wait too long to lock in a rate because the opportunity may be short-lived if the market stages a rebound."

Home loan rates, by the way, had already been at historic lows before the Brexit vote, with 30-year mortgages at about 3.7 percent and 15-year mortgages pegged at 2.7 percent.

"Federal Reserve officials are likely to await the fallout from Brexit before raising rates again," said PNC deputy chief economist Gus Faucher in a research note. "Additional financial market uncertainty could also cause the Fed to be more cautious. Fed futures markets are now pricing in only a 17 percent probability of a rate increase by the end of this year, down from 33 percent yesterday, and a 9 percent probability of a rate cut by the end of 2016."

Overseas travel
Lastly, American travelers may also benefit from the decline in the British pound and Euro, which will make international travel more affordable. The dollar gained 8 percent against the British pound on Friday, PNC said. That's making Britain the most affordable for Americans since 1985.

"The immediate effect: American visitors will pay less for travel to and within Europe and Britain," said Airfarewatchdog president George Hobica in an email. "If the British pound continues to stay low or fall even more, your trip to England will be cheaper." He added, "It's good time to buy pounds for an upcoming trip."

The weaker British pound is prompting some gallows humor on social media, such as one tweet with the image of the rapper 50 Cent, "or as people in the U.K. like to call him 10,000 pounds."

In:
• Mortgage Rates
• Brexit
• United Kingdom