Question

Connie is buying a home using FHA financing, the purchase price is $108,000 the maximum LTV is 97.75% What is the minimum down payment Connie can make?

Answer 1

Answer:

$2,430

Explanation:

Given that,

Purchase price = $108,000

Maximum LTV = 97.75%

LTV refers to the maximum amount that a lender will considering to loan out which is the percentage of the value of the property.

Therefore, the minimum down payment that a Connie must make for taking a loan is as follows:

= Purchase price × (1 - Maximum LTV)

= $108,000 × (1 - 97.75%)

= $108,000 × 0.0225

= $2,430