Interest Rates - Evaluate factors affecting the fluctuation in the rates by Theodora Winck https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq Money Matters - Assignment 2 by Theodora Maldaner Winck en-us 2020-11-30 16:32:20 UTC 2020-11-30 21:02:04 UTC hello@padlet.com https://padlet.net/icons/png/1f4c8.png Video #1 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972149739 In this video by the Bank of America, they explain - in a simplified manner - why Interest Rates fluctuate. Essentially, Interest Rates fluctuate based on the Government's decision to keep the Economy stable. The Government has two main goals: to keep prices stable, and to generate jobs. If prices of products are too high (usually due to high inflation), the government then increases Interest Rates, which in turn will make people spend and borrow less money, and in the end will "force" the sellers to lower the prices of their products. In order to generate more jobs, the Government does the opposite - it lowers Interest Rates. By doing that, they incentivize people to take on loans, buy more products, etc; by doing that, they are directly generated more jobs.

I chose this video because it is short, very well explained and has very few written parts - mostly figures, which helps to understand better this subject that can be pretty difficult to understand.]]> 2020-11-30 16:45:49 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972149739 Website #1 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972150159 On this Globe and Mail article by Gary Rabbior, he talks a little about how inflation influences changes in Interest Rates: if inflation goes up, Interest Rates also go up, and vice-versa. He mentions that if the Bank of Canada senses that inflation might go up, they increase Interest Rates in order to make people spend less and consequently, bring the inflation rates down; accordingly, if they think that inflation might go down, the Bank lowers Interest Rates, which attract people to spend more and take on loans, which will in return provide more money to the Government.

I chose this article because I think it was explained in a very simple yet knowledgable way. Rabbior also linked some other sources on this article if you are interested in learning more about understanding the Economy and the Dollar.]]> 2020-11-30 16:45:53 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972150159 Image #1 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972150678 In this image, it is possible to see the main factors that influence Interest Rate; the image calls for 26, but only 12 are being displayed. Credit Score/History are among the first two factors, which is confirmed by almost every website/video mentioning it being one of the most important factors when determining Interest Rates.

I chose this picture because Interest Rate is a topic that can be very difficult to understand to some people; by looking at a picture that breaks down some factors that influence Interest Rates in a simpler way, it makes is easier and more interesting way to learn.]]> 2020-11-30 16:45:58 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972150678 Image #2 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972210943 In this picture, factors influencing Interest Rates are broken down into three main categories: supply and demand, monetary policy, and inflation.

I chose this picture because it looks like a padlet wall, much similar to what this assignment is about; it is also very well explained, in a simple manner, what are some factors influencing fluctuations in Interest Rates. Differently from the image above, where it only gave us key words/topics, this image provides a little more information about the subject.]]> 2020-11-30 16:56:41 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972210943 Website #2 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972504178 I chose this article by The Star because it talks about how the Bank of Canada increased Interest Rates on the year of 2017. The article explains that the decision of the Bank to increase Interest Rates comes from an economical growth, with more people applying for loans, mortgages, etc., so this way they would take an advantage of that boost of money to the Economy and increase the Interest Rates; accordingly, all associated banks - such as TD Bank, Scotiabank, RSBC, etc - also increased their "prime rates", which are also related to mortgages and loans. Another reason why the Bank of Canada decided to increase the Interest Rates was because of uncertainty regarding USA's political matters. 

I chose this article because it mention a common factor in Interest Rates' changes: economy. At this point it is clear that minor changes in the economy can cause a big impact in loans and mortgages, and the people can end up paying a steep price because of that.
]]> 2020-11-30 17:45:50 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972504178 Website #3 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972580179 This article from The Star is not about Canada - even though it is a Canadian newspaper - but about Europe and Japan, and their respective economies. Here the authors talk about how Europe and Japan have lowered their Interest Rates below zero - meaning, the Bank was paying their customers Interest Rates on their savings, instead of the opposite. This decision was made based on the uncertainty of spending habits that rose from the lockdown and quarantine caused by COVID-19. With the lower rates, the government expects people to spend and invest more money on stocks, which would in return increase the stock market values and benefit the Economy as a whole.

I chose this article first because it talks about the impact of lower Interest Rates, rather than higher ones which we see more often being talked about. Another reason why I chose this article is because it talks about the Economy in Europe and Japan, and we mostly see articles talking about the US Economy, so I thought it would be nice to have some other Countries' insights. ]]> 2020-11-30 17:59:28 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972580179 Welcome! wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972624340 Welcome to my padlet! Here I shared some important and interesting information about Interest Rates - and some factors that influence them. The articles, videos and images posted here will (hopefully) explain in a simplified manner how economy affects Interest Rates, and also some tips on when to save money and when to spend it!]]> 2020-11-30 18:07:14 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972624340 Website #4 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972705268 This is an article posted by the Government of the United States. In this article, Nicole Shea talks about seven factors that influence Interest Rates. In summary, Nicole explains that Credit Score, Home Location, Home Prices and Loan Amount, Down Payment, Loan Term, Interest Rate Type, and Loan Type are all factors that should be taken into consideration before making any decisions such as taking a loan or applying for a mortgage. Nicole also mentions "points" and "lender credits" that are offered by agencies when you are closing a deal; these terms refer to discounts that can be applied to either your interest rate or total cost of loan/mortgage, which benefit both the lender and the buyer.

I chose this article because it was from a very reliable source, and second because it mentioned more than a couple factors that influence Interest Rates changes, when most articles only mention inflation, for example.]]> 2020-11-30 18:21:44 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972705268 Reflective Questions wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972794441 1- What did you learn about your topic that surprised you the most?
I did not know that so many things could impact Interest Rates; I assumed only the Economy as a whole played a role in deciding that, but I was surprised to discover that individual - such as Credit Score - are also very important, and will determine how much more or less you will pay on the same thing as someone else.

2- Provide a real-life example of how this topic is relevant or interesting for you.
After doing this assignment, I have learned a lot more about Interest Rates, which will help me in the future when I take a loan for a car or a mortgage, for example. I know that it is important to start creating a good Credit Score now, because it will have a huge impact in the future. I also know now that is not wise to take on loans when the Economy is not good (when the inflation is high), because I will end up paying more Interest Rates than usually.

3- If you could pass on your knowledge to a family member or a friend, what do you think is the most important thing to pass on?
If I could pass on the knowledge that I learned by doing this assignment to members of my family, or even friends, is to research well before doing any investments or taking any loans; research how the Economy is at the moment, if there are plans for the inflation to go up or down, and if they have a good Credit Score before taking any decisions.]]> 2020-11-30 18:38:18 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972794441 Video #2 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972936209 In this video by Optimal Homes, Karan Singh talks about four factors that influence Interest Rates when you are buying a house.The first topic is Property Use; basically, what is your intention when buying a house. Do you intend to buy it for you to live in, or rent it out? The second topic is Impounds; is the buyer going to pay for the taxes and insurance on their own, or are they splitting it with the seller/lender? The third topic is Credit Score; the better your Credit Score, the better deals on Interest Rates you will get and vice-versa. The fourth and final topic is Loan to Value; this is basically how much down payment you are willing to pay - the more you pay in advance, the lower your rates are going to be.

I chose this video because I liked the way Karan presented the factors - in a whiteboard; he also talked about factors that were not mentioned before in this Padlet. ]]> 2020-11-30 19:04:45 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/972936209 Video #3 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/973003708 In this video by Khan Academy, they basically explain how Interest Rates are the price of "renting money", and what happens to those rates when Economy changes. One good example mentioned in this video is how supply and demand works. In a first scenario, when the Government is printing and lending more money, the supply of money increases, which results in lower Interest Rates. On a second scenario, when consumers start saving less money, they also stop taking loans, which means that Interest Rates now go up, as well as demand for money also goes up. In the third and final scenario, the Government borrows money; in this case, the supply for money is not going to change, assuming that the same amount of money is still being printed, but the demand is going to increase, since there will be less money available. This results in spike of Interest Rates.

What I liked about this video is that the person narrating is also drawing on a black board at the same time, using simple graphs that help understanding the subject being talked about - Interest Rates. ]]> 2020-11-30 19:17:57 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/973003708 Video #4 wincktheodora https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/973312520 In this video by "Your Loan Superhero", Kristi Nowrouzi talks about the major factors that influence a person's Interest Rate. Kristi says something very interesting which is "there is not an easy answer when people ask what the Interest Rate of a company is"; according to her, there are several factors to take into consideration when determining one's Mortgage's Interest Rate. One of them is the "Type of Mortgage Program": if it is a government loan, it is going to offer lower Interest Rates than a conventional loan. Another factor is the "Loan to Value", or how much money you are borrowing versus the purchase price of a property; the lower amount of money you borrow to pay off a property, the lower Interest Rates you will have. The last factor is Credit Score; as mentioned several times already in this Padlet, Credit Score plays a big role when determining one's Interest Rates. The higher the Credit Score, the lower the Interest Rates, and vice-versa. It is very important to ensure the highest possible Credit Score, to ensure not only low Interest Rates on Mortgages, but also on car and tuition loans.

What I liked most about this video is that Kristi is a Mortgage Loan Officer, so I felt like she was talking directly to me and analyzing my options, even though I have never applied for a loan. ]]> 2020-11-30 20:27:05 UTC https://padlet.com/wincktheodora/p6fzt1i0yqtzuuwq/wish/973312520