Based on the rising housing prices of 2000-2005, many buyers opted for interest-only loans and variable rate mortgages with little or no down payment because
A) they expected short-term interest rates to fall substantially in the future and this would reduce their monthly mortgage payment in the years ahead.
B) variable rate mortgages are a good way to reduce the risk accompanying your investment when you plan to stay in the house for a long time.
C) they thought housing prices would continue to rise and therefore they would be able to sell the house for a profit within a couple of years.
D) they could easily recoup their investment, even if there was a downturn in housing prices in the future.
Correct Answer:
Verified
Q24: Which of the following describes the relationship
Q25: The strong demand for housing, rising housing
Q26: The increase in the share of loans
Q27: The secondary mortgage market is the market
A)
Q28: Which of the following is most likely
Q30: After new HUD guidelines were issued in
Q31: Residential mortgages historically carried a capital requirement
Q32: Interest payments on home mortgages and home
Q33: Between 2001-2005,
A) both sub-prime and adjustable rate
Q34: The Fed's low short-term interest rate policy
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