Final answer:
The primary considerations for a mortgage loan decision are the borrower's ability to repay, the collateral's value, and the loan's profitability. Lenders scrutinize past payment history, current interest rates compared to the loan rate, and the borrower's financial stability to determine these factors. The correct option is D.
Step-by-step explanation:
The three overriding considerations of a lender's mortgage loan decision are the ability to repay, the value of the collateral, and the profitability of the loan. A lender will look at various factors when determining these considerations.
An example would be a borrower's credit history; a borrower who has been late on a number of loan payments is seen as a higher risk, making the loan less valuable.
Interest rates also play a significant role. If current interest rates have risen since the loan was made, then the loan at its original lower interest rate becomes less attractive to investors in the secondary market. On the other hand, if current interest rates have fallen, a loan with a higher fixed interest rate is more valuable.
Additionally, the borrower's ability to repay, often demonstrated through a record of high profits, makes a loan more attractive as it reduces the perceived risk of default.