Finance
A Massachusetts lender requires a property appraisal for a purchase loan. The appraisal comes in at $490,000 but the purchase price is $520,000. The lender will typically base the loan on:
AThe purchase price of $520,000
BThe average of the two values ($505,000)
CThe appraised value of $490,000✓ Correct
DThe assessed value from the town
Explanation
Lenders base the loan on the lesser of the appraised value or the purchase price. Since the appraisal ($490,000) is lower, the loan is calculated on $490,000.
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