Practice Quiz

Texas Real Estate Exam

Category - Texas

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Mortgage interest rates usually decrease when:
  1. The supply of mortgage money increases substantially
  2. Inflationary trends are on the upswing
  3. Businesses are expanding and making large capital expenditures
  4. The Federal Reserve Board increases the reserve requirements for member banks
Explanation
Answer: A. When most of the mortgage lenders have substantial sums available for mortgage loans, they usually reduce their interest rate to attract borrowers from competing lenders. The other three business conditions mentioned in choices b), c) and d) tend to drive rates up.
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