Real Estate Math
A Tennessee property is valued at $425,000. The bank will lend 75% LTV. The buyer has $60,000 available. Can the buyer purchase the property, and if so, what is the down payment shortfall or surplus?
A$46,250 shortfall✓ Correct
B$46,250 surplus
C$106,250 shortfall
DExactly sufficient
Explanation
Loan = $425,000 × 75% = $318,750. Down payment needed = $425,000 − $318,750 = $106,250.
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