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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

For the following second mortgage applications, calculate the percentage of appraised value and the potential credit.

Appraised Lender's Percentage of Balance of First Potential
Value Percentage Appraised Value Mortgage Credit
$114,500 65% $77,900

_____

To determine

To calculate: The percentage of appraised value and the potential credit if the appraised value is $114,500 and lender’s percentage is 65% and the balance of first mortgage is $77,900.

Explanation

Given Information:

The appraised value is $114,500 and lender’s percentage is 65% and the balance of first mortgage is $77,900 in the second mortgage applications.

Formula used:

The formulas used for calculation is listed below:

Step1:

Percentage of appraised value=Appraised value×Lender's Percentage

Step2:

Potential credit=Percentage of appraised valueFirst Mortgage balance

Calculation:

Here, the appraised value is $114,500 and lender’s percentage is 65% and the balance of first mortgage is $77,900 in the second mortgage applications.

Since, home equity loan is the kind of single mortgage loan based on the available equity in home and credit limit is the specific amount of credit which the borrower has been approved at any particular point of time

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