Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to the crazy increase in the housing market. When Sean purchased his home, he made the minimum required for a conventional mortgage. Since then, he has paid $30,000 down on his original mortgage. He is now ready to undertake some major renovations to his home and his bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current market value less his outstanding mortgage balance. What is the amount of credit that the bank is willing to provide Sean under a HELOC? $65,000 B. $50,000 $75,000 D. $30,000 E) $90,000
Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to the crazy increase in the housing market. When Sean purchased his home, he made the minimum required for a conventional mortgage. Since then, he has paid $30,000 down on his original mortgage. He is now ready to undertake some major renovations to his home and his bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current market value less his outstanding mortgage balance. What is the amount of credit that the bank is willing to provide Sean under a HELOC? $65,000 B. $50,000 $75,000 D. $30,000 E) $90,000
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 56P
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Transcribed Image Text:Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to
the crazy increase in the housing market. When Sean purchased his home, he made the
minimum required for a conventional mortgage. Since then, he has paid S$30,000 down on his
original mortgage. He is now ready to undertake some major renovations to his home and his
bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current
market value less his outstanding mortgage balance. What is the amount of credit that the
bank is willing to provide Sean under a HELOC?
A
$65,000
B.
$50,000
$75,000
$30,000
$90,000
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