Real Estate Math

A Kansas home appraises for $240,000. The lender lends at 80% LTV. The purchase price is $235,000. What is the maximum loan amount?

A$188,000✓ Correct
B$192,000
C$196,000
D$200,000

Explanation

The lender uses the lower of appraised value or purchase price. Here, purchase price ($235,000) is lower.

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