Loans:What is the norm for US Mortgages?

What is the historical norm for US mortgages. At least, the norm since the end of WWII and before the craziness of 2008

Question options:

  • 30 year, fixed, compounded monthly with monthly payments.
  • Five year, variable, interest only with monthly payments.
  • 30 year, fixed with monthly payments.
  • 30 year, variable with mostly payments compounded semi-annually.

The historical norm is a loan with 30 year, fixed, compounded monthly with monthly payments.

The main reason that variable (adjustable) rate mortgages are not more popular is that the borrower only benefits if the interest rate falls but loses if the interest rate increases. Such was the case when housing prices began to decline in 2006. Payments went up and refinancing became nearly impossible, so many people "chose" to default on their mortgages.

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