Question

Suppose you buy a home for $400.000 and pay 20%down. What will be the amount of your mortgage?

Answer 1

The term mortgage refers to a loan used to purchase or maintain a home, land, or other types of real estate.

A mortgage is a loan – provided by a mortgage lender or a bank – that enables an individual to purchase a home or property. While it’s possible to take out loans to cover the entire cost of a home, it’s more common to secure a loan for about 80% of the home’s value.

We are told that the cost of the home is $400,000

Since a down payment is 20%

Let the whole cost of the home be in terms of percentage, this will be = 100%

Then the Mortgage will be

`100\text{ \%-downpayment}`

`100\text{ \%-20\%=80\%}`

Thus, the mortgage amount will be

`\begin{gathered} 80\text{ \%}*400,000 \\ =(80)/(100)*400,000 \\ =\text{ \$320,000} \end{gathered}`