Question

Sheldon has a home valued at $108,000 and an outstanding mortgage of $70,000. If his lender is willing to provide a home equity loan of up to 80% of market value, how much could Sheldon borrow using a home equity loan?

Answer 1

$16,400

Step-by-step explanation:

Sheldon has a home that is valued at $108,000

The outstanding mortgage is $70,000

The lender is ready to provide a home equity loan of 80% market value

Therefore, the amount of money that Sheldon would be able to borrow can be calculated as follows

= 80/100×$108,000

= 0.8×$108,000

= $86,400

$86,400-outstanding mortgage

= $86,400-$70,000

= $16,400

Hence Sheldon should be able to borrow $16,400 using the home equity loan