Real Estate Math

A buyer in Alaska makes an offer of $325,000 with 5% down. The lender requires a loan-to-value not exceeding 95%. What is the maximum loan amount?

A$285,000
B$300,875
C$308,750✓ Correct
D$325,000

Explanation

Down payment = $325,000 × 5% = $16,250. Loan = $325,000 − $16,250 = $308,750. LTV = $308,750 ÷ $325,000 = 95%. ✓

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