Crystal and Denise would like to put a small addition on their current home. The home is
Question:
Crystal and Denise would like to put a small addition on their current home. The home is valued at $800,000.00 and they have a mortgage on the home with a current balance of $400,000.00. The couple is considering applying for a Home Equity Line of Credit to pay for the addition. What is the maximum limit they can get on a home equity line of credit assuming they qualify?
If a lending institution is paying an average of 2% per year for the money it borrows from its customers and is earning an average of 5.5% per year on the money it lends out to customers and the average loan costs 1% per year on overhead costs, how much will the lending institution make in profit in one year on a typical loan for $100,000.00?
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta