Question

The buyers secured a loan at 75% (LTV) ration. The interest rate was 7.125%, and the term was for 30 Years. The first month's interest payment was $477.82. What was the appraised value of the property?

A. $103.700
B. $80,475
C. $107,300
D. 79,239

Answer 1

The appraised value of the property is $107,300.

Step-by-step explanation:

To calculate the appraised value of the property, we need to first find the loan amount. The first month's interest payment of $477.82 is 1/12 of the annual interest payment. So, the annual interest payment is $477.82 * 12 = $5733.84. We can use the formula for the loan amount:

Loan Amount = Annual Interest Payment / Interest Rate

Loan Amount = $5733.84 / 0.07125 = $80,475

Since the loan-to-value (LTV) ratio is 75%, the appraised value of the property is:

Appraised Value = Loan Amount / LTV Ratio

Appraised Value = $80,475 / 0.75 = $107,300