Finance
A West Virginia lender's appraisal values a home at $200,000 but the buyer has agreed to pay $215,000. The lender will base the loan on:
AThe contract price of $215,000
BThe average of contract price and appraised value
CThe lower of the appraised value or the contract price✓ Correct
DThe county assessed value
Explanation
Lenders base loan amounts on the lower of the appraised value or the contract price. If the appraisal comes in at $200,000, the lender will use $200,000 as the basis for the loan-to-value calculation, not the $215,000 contract price.
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