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Soloha48 [4]
3 years ago
8

Let’s suppose that a lender has established a 90% loan-to-value ratio cutoff as one of its primary underwriting criteria. If a b

orrower is willing to make a down payment of $125,000 on a home recently appraised at $550,000, what best describes the lender’s decision on whether or not to approve the loan along this dimension?
Business
1 answer:
sergey [27]3 years ago
8 0

Answer:

77.27% or

(17/22)%

The loan will accepted

Explanation:

property value 550,000

haircut 125,000

550,000 - 125,00 = 425,000 mortage value

425,000/550,000 = 77.27% = (17/22)%

The ratio is below the cutoff, so it is within the boundaries the lender expect. The loan will be given.

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