Assume your home is worth $200,000 on which there is a mortgage balance of $100,000. Banks lend

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Assume your home is worth $200,000 on which there is a mortgage balance of $100,000. Banks lend up to 80% of the home value as home equity loan.

a) what is the maximum you can borrow on home equity loan?

b) if a loan for $1200 at 10% interest rate is an add-on loan with equal monthly payment over two years, what is its annual percentage rate (APR)?

c) Ability to get loan with low interest rate and good terms depends on the five C’s of credit. Describe the five C’s of credit.

Related Book For answer-question

Financial Accounting and Reporting a Global Perspective

ISBN: 978-1408076866

4th edition

Authors: Michel Lebas, Herve Stolowy, Yuan Ding

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Posted Date: Dec 18, 2023 10:26 PM

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Assume your home is worth $200,000 on which there is a mortgage balance of $100,000. Banks lend

Question:

Expert Answer:

a To calculate the maximum amount you can borrow on a home equity loan we need to determine 80 of the home value 80 of 200000 08 200000 160000 Therefore the maximum amount you can borrow on a home equ... View the full answer

Financial Accounting and Reporting a Global Perspective

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