Final answer:
The lender's information should be compared with the Earnest Money Agreement, which specifies the loan terms. In the financial capital market, a borrower may use collateral, secure a cosigner, or share a positive credit history to reassure banks. Loan terms favor borrowers or lenders depending on the relationship between mortgage interest rates and the rate of inflation.
Step-by-step explanation:
The information from a lender on the assumption of a mortgage should be compared primarily with the Earnest Money Agreement because it contains the terms and conditions of the sale, including financing. It is less critical to compare with the Warranty Deed or Bill of Sale, as they deal with the transfer of title and ownership of personal property, respectively, rather than the terms of a loan. Restrictive Covenants are also less directly related as they pertain to the use of property rather than loan terms.
In the financial capital market, to reassure a bank facing imperfect information about whether the borrower will repay the loan, individuals could offer various assurances. For instance, providing collateral, securing a cosigner, or demonstrating a strong credit history are common methods to increase the likelihood of loan approval.
When analyzing whether it is better to be a borrower or lender during various years, one must consider mortgage interest rates in relation to the rate of inflation. If the interest rate is low and inflation is high, it generally favors the borrower. Conversely, high interest rates and low inflation typically benefit the lender.
Lastly, the terms of a mortgage loan typically extend over either 15 years or 30 years. Key factors influencing this decision include the borrower's credit history and the nature of the credit market at the time of the loan.