Question

You purchased a Colonial home eight years ago using a traditional 30-year-fixed conventional loan.

Answer 1

To determine the best years for borrowing or lending money to buy a home, compare the mortgage interest rates with the rate of inflation for each year.

Step-by-step explanation:

A mortgage loan is a loan that a person makes to purchase a house. The question asks about the years in which it would have been better to be a person borrowing money from a bank to buy a home, and the years in which it would have been better to be a bank lending money. To evaluate this, we need to consider the mortgage interest rates and the rate of inflation for each year.

1. If the mortgage interest rates for a particular year were relatively low compared to the rate of inflation, it would have been better to be a person borrowing money from a bank.
2. On the other hand, if the mortgage interest rates for a particular year were relatively high compared to the rate of inflation, it would have been better to be a bank lending money.

By comparing the mortgage interest rates to the inflation rates for each year mentioned in Table 19.11, you can determine the best years for borrowers and lenders. For example, if the mortgage interest rates were 3% and the rate of inflation was 2%, it would have been better to be a person borrowing money from a bank because the interest rates were lower than inflation.