Quiz: Do you know how mortgage rates are determined?
Are you in the market to buy a new home or refinance your current mortgage? You've probably noticed that mortgage rates seems to fluctuate significantly, but do you know how they're set? Take our quiz to see if you know the science behind the seemingly random method of determining mortgage rates.
What factors have the greatest impact on the interest rates charged for mortgage loans?
stock market performance and foreign exchange rates
prices for gold, silver and oil
inflation, U.S. treasuries price and the Federal Reserve
What is typically the first major financial decision a teenager makes?
whether to apply for student loans
whether to get a summer job
whether to buy a car
When you take out a mortgage, are you assuming all the risk?
only if you don't have a co-signer
the percentage of your down payment for the home
the amount of risk the bank is taking on you and the economy
the most money the bank can get without bankrupting you
In the U.S., what usually happens with your new mortgage after your lender gives you the loan?
Your mortgage payments are used to pay depositors and to generate profit.
It causes your credit to be frozen for six month.
Your mortgage is sold to a third party.
What does an aggregator do?
auctions off bank-owned properties
packages mortgages together into a mortgage-backed security
repossesses homes from people in default on their mortgage
What are shares in a mortgage-backed security called?
When comparing rate of return, what U.S. treasuries item does an investor compare to the interest rate on a 30-year fixed mortgage?
What happens to mortgage interest rates when economists predict a rise in inflation?
They tend to remain stable.
They tend to increase.
They tend to decrease.
How does the Federal Reserve influence the federal funds rate charged by banks for overnight loans?
by selling or purchasing bonds and foreign currency