The Federal Reserve board is scheduled to meet today.  They determine what the percentage rate for loans.  Many analyists think that they are ready to lower interest rates.  This would be the first time in over four years that this has happened.  They feel that this needs to be done to prevent the housing market from falling even farther, which could cause the economy to go into a recession.

If this happens it would affect millions of people.  People who have borrowed money based on these rates.  The lower rate could encourage people to spend and invest more, which would help out the economy.  With a rate drop the prime lending rate, currently at 8.25%  would drop.  The Federal Reserve is expected to drop the rate .25%, and maybe up to a half of a percent.  This would affect many borrowers that have HELOC loans. (Home Equity Line Of Credit) It will also affect borrowers with ARM’s (Adjustable Rate Mortgages)

This drop in a rate would lower the borrowers payments, which would give them more money to spend on other goods and services, which would help out the economy.  It would also make mortage payments less expensive, which would make buying a house more affordable for home buyers, which would help the housing market.