Since the 1980s, Mortgages Allowing Less Than 20% Down Payment

question 21

Multiple Choice

Since the 1980s, mortgages allowing less than 20% down payment have appeared, requiring

• A)lenders to insure the borrower against physical damage to the house.
• B)lenders to insure the borrower against loss in case of default.
• C)borrowers to insure the lender against loss in case of default.
• D)both borrowers and lenders to hold each other harmless in case of default or physical damage.

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Definitions:

Lending Institution

A financial institution that provides loans to individuals or businesses.

Gross Working Capital

The total of all current assets of a company, indicating the liquid resources available for day-to-day operations.

Accounts Payable

Liabilities of a business that represent its obligations to pay off a short-term debt to its creditors or suppliers.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be converted to cash in the short term.