Real Estate Math

A property has a loan-to-value ratio (LTV) of 80%. The property is appraised at $420,000. What is the maximum loan amount the lender will provide?

A$84,000✓ Correct
B$350,000
C$380,000
D$400,000

Explanation

Maximum loan = Appraised Value × LTV = $420,000 × 0.80 = $336,000. The down payment would be $420,000 − $336,000 = $84,000 (20%).

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