Finance
A Colorado property appraises for $385,000 on a $400,000 purchase contract. The lender will only lend 95% of the appraised value. What is the maximum loan amount?
A$365,750✓ Correct
B$380,000
C$385,000
D$395,000
Explanation
Maximum loan = Appraised Value × LTV = $385,000 × 95% = $365,750. The lender bases the LTV on the LOWER of the appraised value or purchase price.
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