Topic 1 - Property and mortgage markets

Question 1

How did the credit crunch affect Mortgage market

Answer 1

1. Boom
2. Securitisation
3. Exploding Mortgages
4. Housing Halt
5. Widening Crisis
6. Bank run in the UK
7. Global Financial Crisis

Question 2

After credit crunch

Answer 2

1. recession
2. Sellers did not want to sell
3. Banks were not lending
4. Lenders raised their requirements

Question 3

What affects the mortgage market

Answer 3

1. Interest rates
2. Inflation
3. The economy
4. Supply and demand
5. Government action
6. Non-Property funding

Question 4

Factors that influence the interest rates

Answer 4

1. Level of Government Borrowing
2. Monetary Policy
3. Foreign Interest rates
4. Higher levels of individual borrowing

Question 5

Basis Point

Answer 5

One hundredth of one per cent

Question 6

Inflation Types

Answer 6

General inflation-

House Price inflation

Question 7

Negative Equity

Answer 7

A situation in which the market value of a property falls below the outstanding amount of the mortgage loan secured on it .