When the United States Federal Reserve came out pledging to keep key interest rates at their super low levels until at least late 2014 opportunities that I thought might be closing were opened back up for me. According to ABC News , this move was done in an effort to help kick start a still sputtering economy.
With the added time I will now be able to add to my savings in an attempt to gain what I have been after for some time now; a new home. With rates being as low as they have been for so long now I figured that they would be going up soon and that I might miss my window of opportunity to gain a lower rate on a mortgage. Now, it’s a whole new ball game.
Low Rates Equals Low Mortgage
Even though the interest paid on a mortgage isn’t the same s the key interest rates that the Federal Reserve is keeping lower, it is affected by that rate. So, the lower that rate stays the lower my mortgage payments will be due to a lower interest rate.
More Time to Save
My biggest obstacle with trying to buy a home is my ability to come up with enough money to put down. While the standard is 20%, I want to go above and beyond that as the less I have to borrow the less I have to pay back with interest.
While I have been able to save a bit of money to use as a down payment, it isn’t nearly enough. Now I have a renewed opportunity to save more money as I know key rates will stay low for a little while longer.
Possible Double Edged Sword
My only concern is that with the key rates staying the way they are, the dollar is likely to weaken. All this really means is that the dollar will by less of a product as it loses value. Usually though, this doesn’t happen very quickly, but should inflation kick in as a negative side effect of this move by the Federal Reserve, then my open opportunity might not matter all that much.
Business as Usual
I know I can’t predict the future and there is no way to tell what this move by the Federal Reserve will ultimately mean. I am hopeful though that the opportunities to save a bit more and get the home of my dreams will remain steady for a little longer at lease. So, I will go on with a “business as usual” attitude and take advantage of what might be an “extension” on my dreams as I continue to save more money for a down payment and look for the perfect home for my family to buy.