A neoconservative is one who recognizes three things: the merit of the free market in economics; the priority of politics over economics; and the primacy of morals over both. In the 1990s, this third characteristic is the most salient, and its primary target â secular humanism â is coming into ever sharper focus.
The first is how mortgage rates are determined, followed by the effect on mortgage rates by the U.S. Federal Reserve Bank. The only correct answer is mortgage bonds or mortgage-backed securities. Mortgage rates are not based on the 10-year Treasury Note.
The margin is specified in the note and remains fixed over the life of the loan. For example, a mortgage interest rate may be specified in the note as being LIBOR plus 2%, 2% being the margin and LIBOR being the index. The final way to apply an index is on a movement basis. In this scheme, the mortgage is originated at an agreed upon rate, then adjusted based on the movement of the index.