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Unformatted text preview: The purpose of the lending rate is to determine which home buyers are better qualified to borrow money from the Federal Reserve to put into buying a home as well as startup costs. If interest rates are too high, people will turn to banks to borrow money because banks tend to have lower interest rates, thus causing the prices of homes on the market to drop. A recommendation I could have given first time home buyers pre June 2010 was to check into using the American Recovery and Reinvestment Act (ARRA) which was an act that Congress created for first time home buyers which would have given them up to $8,000 in tax credits. This act expired, unfortunately, in June 2010. Now, I would simply recommend doing your homework when considering purchasing a home. There may be a few options that exist that may be beneficial that are similar to the ARRA. One who wishes to save money and get the best out of their investment will check all avenues thoroughly....
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This note was uploaded on 02/11/2011 for the course XECO 212 taught by Professor Cohen during the Fall '10 term at University of Phoenix.
- Fall '10