fin350- Mortgage markets

Business & Finance
Tutor: None Selected Time limit: 1 Day

If the interest rates on homes is lower, as you mentioned, does that cause a buyer to purchase a more expense home than they would if interest rates were higher? 

If this is true is there an increased risk the home buyer would default?

Aug 2nd, 2015

Thank you for the opportunity to help you with your question!

to me personally i think if the interest rates on homes is lower this makes more buyers to purchase less expensive home than when the interest rates are higher simply because  interest rates play a big role in how large the payment will be. Whereby a  slight rise in historically low interest rates could make it a lot more expensive. so this means that higher interest rates mean lower borrowing power.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Aug 2nd, 2015
the risk would be if there is  increased mortgage rates this will reduce affordability, reduce demand, and hence lower home prices. That’s certainly one possibility, though the reality might be more complex.


Aug 2nd, 2015

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Aug 2nd, 2015
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Aug 2nd, 2015
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