The action that will result in in a higher interest rate for all types of mortgage loans is: D): the Federal Reserve raising the prime rate.
What is prime rate?
Prime rate can be defined as the interest rate which are mostly used by financial institution who gives out loans to borrowers.
Prime rate is the interest rate that banks often offers their creditworthy clients.
Mortgages loan can result in higher interest rate for borrowers when the federal reserve raised the prime rate.
This implies that whenever federal reserve increase the prime rate banks tends to charge borrowers a high interest on the loan amount they received.
Inconclusion the action that will result in in a higher interest rate for all types of mortgage loans is: D): the Federal Reserve raising the prime rate.
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