Aside from what it means for our national economy as a whole, the Fed’s “patience” could be good news for home buyers.
Interest rates on home loans were expected to increase this spring, but it appears those rates will likely remain stable following the Federal Open Market Committee’s decision Wednesday to hold the line on interest rates.
That’s good news for potential homebuyers. On a $100,000 loan at an interest rate of 4.5 percent, the homeowner would have monthly payments – without taxes and insurance – of $506.69. If interest rates rose from 4.5 percent to 4.75 percent, those monthly payments – without taxes and insurance – would rise to $521.65. The higher interest rate would mean a higher monthly payment of $14.96 and $5,386.33 in interest over the life of a loan.
That additional amount could be the difference between someone qualifying for a loan and being turned down by a bank.