A loan with negative amortization always leads to equity


Please answer the following questions (give the explanation)

1. A loan with negative amortization always leads to:

a) Foreclosure

b) Lower monthly payments

c) A higher principal balance

d) Lower interestpayments

2. Equity can build up in a property by:

a) Price appreciation and positive loan amortization

b) Price appreciation and negative loan amortization

c) Price depreciation and positive loan amortization

d) Price depreciation and negative loan amortization

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Financial Management: A loan with negative amortization always leads to equity
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