Finance
In South Carolina, what is 'discount rate' as used by the Federal Reserve, and how does it affect mortgage rates?
AThe rate the Fed charges banks to borrow — higher discount rates generally lead to higher mortgage rates✓ Correct
BThe rate at which real estate is discounted for quick sale
CThe rate used to calculate mortgage discount points
DThe amount by which FHA loans reduce the interest rate
Explanation
The Federal Reserve's discount rate influences the cost of money throughout the banking system. When the Fed raises its rates, the cost of borrowing increases for banks, which generally translates to higher consumer mortgage rates. Conversely, lower Fed rates tend to reduce mortgage rates.
Related South Carolina Finance Questions
- In South Carolina, what is 'interest-only' mortgage financing?
- In South Carolina, the 'Community Reinvestment Act' (CRA) encourages banks to:
- In South Carolina, which government-sponsored enterprise purchases conforming conventional loans from lenders?
- A 'conforming loan' in South Carolina is one that:
- A South Carolina lender's 'appraisal contingency' protects the buyer when:
- South Carolina follows judicial foreclosure procedures for which type of security instrument?
- What is the purpose of a 'discount point' paid at closing on a South Carolina mortgage?
- In South Carolina, what is the primary purpose of a 'mortgage commitment letter'?
Practice More South Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free South Carolina Quiz →