Mortgage Insurance Protects Lenders When a Borrower Defaults by Making

Multiple Choice

Mortgage insurance protects lenders when a borrower defaults by making up any shortfall needed to repay the loan if the sale of the property doesn't cover the debt. Federally regulated lenders must have mortgage insurance on loans where the buyer's down payment is less than 20 per cent of the price. In this example, what signal do potential homeowners give to indicate they are low-risk?

A) indicating high income
B) buying an expensive home
C) having a large down payment
D) buying an inexpensive home