When applying for a home mortgage, Alison has to list all of her monthly salary and obligations for debts and current expenses. This information is gathered to determine Alison's
A) collateral.
B) character.
C) conditions.
D) capacity.
E) capital.

Question

Quizplus · Accepted Answer

Alison's monthly salary and obligations for debts and current expenses are used to assess her capacity to make mortgage payments. This is one of the key factors that lenders consider when approving a mortgage. Collateral (A) refers to assets that may be used as security for the loan, while character (B) refers to the borrower's credit history and reputation. Conditions (C) refer to the economic and market conditions that may affect the borrower's ability to repay the loan, and capital (E) refers to the borrower's assets and net worth. While these factors may be considered in the mortgage application process, capacity is the most important factor in determining whether to approve a mortgage loan.

When Applying for a Home Mortgage, Alison Has to List