Mary and Marty are interested in obtaining a home equity loan. They purchased their house five years ago for $ 125,000 and it now has a market value of $ 156,000. Originally, Mary and Marty paid $ 25,000 down on the house and took out a $ 100,000 mortgage. The current balance on their mortgage is $ 72,000. The bank uses 70% of equity in determining the credit limit. What will their credit limit be if the bank bases their credit limit on equity invested and will loan them 70% of the equity?
Answer to relevant QuestionsRefer to question 8. What will Mary and Marty’s credit limit be if the bank uses the market value of equity to determine their credit limit and will loan them 70% of the equity? In Question 8 Mary and Marty are interested ...How do lenders protect their interest in a home? Describe two government-backed home loan programs. Describe some of the costs of buying a home. Are there potential tax savings associated with buying a home? Why is the reputation of the school system in the area of the home you are buying important? Denise and Kenny are ready to make an offer on an 1,800- square- foot home that is priced at $ 135,000. They investigate other homes on lots of similar size and find the following information: • A 2,400- square- foot home ...
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