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Fed rate cuts coming: How to prepare your finances and what it may impact most

Andrey Popov via Getty Images<br/>

By: Taylor Nimmo

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CINCINNATI — The Federal Reserve is expected to cut interest rates later this month, and the changes could significantly impact your finances — from savings accounts to mortgage rates.

We've been discussing the possibility of rate cuts for months, and now it appears that it may actually happen. Financial advisor John Bovard says big changes are on the way.

"Certain economists are pricing in two to three rate cuts before the end of the year," Bovard said.

How rate cuts will affect your money

Borrowing could get cheaper, but your savings may not stretch as far.

"One thing to be aware of as a consumer is your interest rate may be decreasing on that money," Bovard said.

WATCH: What to expect ahead of the Federal Reserve cutting interest rates

Federal Reserve expected to cut interest rates later this month

On the other hand, credit cards and car payments may become more affordable.

If you're looking to buy or sell your home, rate cuts will impact your mortgage.

"Right now, the 30-year mortgage is about 6.5%. The goal is to get that below 6% at the end of the year," Bovard said.

If that does happen, it could mean significant changes for the housing market.

"What that could mean is a larger supply of available homes for sale," Bovard said.

Here in the Tri-State area, lower rates could shake up the housing market.

"So a lot of people that own a home now in the tri-state area have a low interest rate between 3 or 4%," Bovard said.

If rates fall, more homeowners may decide to sell — giving buyers more options to choose from.

The Fed meets later this month, but here's how you can get ready now:

Fix up your house to get it ready to sell: "Fixing up a certain room, repairing drywall, painting," Bovard said.
Check your credit score and boost savings for a down payment
Track rates closely: "Reach out to a bank or mortgage lender to actively start to see what their rates are doing."

Whether you're saving, borrowing, or house hunting — rate cuts could affect it all. Take steps now, so you don't waste your money.

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