Real Estate Math (alternative)

A Maryland buyer offers to pay $310,000 for a property appraised at $300,000. How much must the buyer pay above the appraised value if the lender will only lend 80% of appraised value?

A$10,000
B$50,000
C$59,500✓ Correct
D$25,500

Explanation

Lender maximum loan = 80% × $300,000 = $240,000. Buyer needs $310,000 − $240,000 = $70,000 in cash (including the $10,000 above appraisal plus the $60,000 minimum down payment).

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