Question

Evelynn has a home that was recently appraised for $127,000, and the balance on the existing mortgage is $88,350. If a bank is willing to loan up to 75% of the appraised value, calculate the potential amount of credit available on a home equity loan.

Answer 1

$6,900

Explanation:

To calculate the potential amount of credit available on the home equity loan, first you have to calculate 75% of the appraised value:

$127,000*75%= $95,250

Then, as Evelynn has an existing mortgage, you have to subtract this amount from $95,250:

$95,250-$88,350= $6,900

According to this, the answer is that the potential amount of credit available on a home equity loan is $6,900.