Question

A few years ago, Simon Powell purchased a home for $235,000. Today, the home is worth $420,000. His remaining mortgage balance is $185,000. Assuming that Simon can borrow up to 80 percent of the market value, what is the maximum amount he can currently borrow against his home?

Answer 1

Answer:

$151,000

Explanation:

To find the maximum amount that Simon can borrow, we have to calculate the 80% of the market value of the house and subtract from that amount the remaining mortgage balance that he has:

Market value of the house: $420,000

Remaining mortgage balance: $185,000

$420,000*80%= $336,000

$336,000-$185,000= $151,000

The maximum amount that Simon can currently borrow against his home is $151,000.