What is the difference between a mortgage and a mortgage-backed security ? A. Mortgages are loans, whereas mortgage-backed securities are bond-like debt instruments. B. Mortgages are usually used to create a portfolio, whereas mortgage-backed securities are held separately. C. No interest is paid on mortgage-backed securities, whereas interest and principal payments are paid on mortgages. D. Mortgages are provided to households or firms, whereas mortgage-backed securities are provided mainly to financial institutions

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Bailey Richmond

1 July, 13:39

What is the difference between a mortgage and a mortgage-backed security ? A. Mortgages are loans, whereas mortgage-backed securities are bond-like debt instruments. B. Mortgages are usually used to create a portfolio, whereas mortgage-backed securities are held separately. C. No interest is paid on mortgage-backed securities, whereas interest and principal payments are paid on mortgages. D. Mortgages are provided to households or firms, whereas mortgage-backed securities are provided mainly to financial institutions

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Valinto · Answer 1

The correct answer is A. Mortgages are loans, whereas mortgage-backed securities are bond-like debt instruments.

Explanation:

The mortgage loan is the product that allows you to have the necessary amount to buy or rehabilitate a home or other property.

As we said, credit institutions require a guarantee before granting a loan. In the case of mortgages, the owner of the loan guarantees the property itself (mortgage), which will be passed to the financial institution in case of default. In addition to this mortgage guarantee you offer, as in a personal loan, your personal guarantee.