Question

Larry took out an 80/20 mortgage on a $225,000 home. What is the amount financed under the first mortgage? A.$45,000 B.$180,000 C.$164,000 D.$225,000

Answer 1

The amount financed under this mortgage is $180,000

B is correct.

Explanation:

Larry took out an 80/20 mortgage on a $225,000 home.

80/20 mortgage means pay 20% down payment and 80% finance amount of home value.

Home value = $225,000

Here, we need to find finance amount from $225,000

We will calculate the 80% of $225,000

Finance amount = 80% of 22500

= 0.80 x 225000

= 180000

Hence, The amount financed under this mortgage is $180,000

Answer 2

An 80/20 payment means 80% will be paid as mortgage and 20% will be the piggyback loan. Therefore, the mortgage will be:
0.8 x 225,000
= $180,000

The answer is B.