Under which condition can a high-cost loan be approved?

A high-cost loan can be approved under the condition that the borrower can make scheduled payments. This is important because one of the key considerations in lending is ensuring that the borrower has the ability to repay the loan, particularly for high-cost loans, which typically have higher interest rates and may involve more risk for the lender.

The ability to make scheduled payments indicates a borrower's financial stability and readiness to handle the loan’s obligations. Responsible lending practices dictate that lenders must assess the borrower's financial situation thoroughly to ensure that they can afford the mortgage payments without leading to a default situation.

The other options do not support responsible lending practices. A lender approving a loan simply based on the expectation that a borrower may default undermines the purpose of the lending process and poses significant risks. Approving loans based on market rates or borrower requests alone ignores the essential evaluation of a borrower's financial capability and does not address whether the loan terms are sustainable for the borrower.