Question

Most lenders, when they are deciding whether or not to make a proposed real estate loan, try to minimize the:

A) Overall net yield
B) Loan-to-value ratio
C) Chance of a substandard loan becoming a part of their portfolio
D) The borrower's difficulties which may arise in the future, such as a divorce or death

Answer 1

Lenders try to minimize the chance of a substandard loan becoming a part of their portfolio.

Step-by-step explanation:

When lenders are deciding whether or not to make a proposed real estate loan, they try to minimize the chance of a substandard loan becoming a part of their portfolio. This means that they want to avoid loans that have a higher risk of default or nonpayment. Lenders want to ensure that they will receive the principal and interest payments on the loan, so they carefully assess the borrower's financial situation, credit history, and the value of the property being financed.