Question: Suppose that you purchase a house and put down a very small down payment of 5 % , taking out a mortgage for the rest

Suppose that you purchase a house and put down a very small down payment of 5%, taking out a mortgage for the rest of the purchase price.
If housing prices fall by 10%, which of the following is true?
Because you are highly leveraged, you will still gain from the purchase of the house.
The bank is likely to foreclose on the mortgage because of the fall in housing prices.
You now owe more on your mortgage than the house is worth, and you are more likely to default.
IDON'T KNOWYET
Suppose that you purchase a house and put down a

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