The market value of Karen's home is $120,000 and the balance on her mortgage loan is $80,000.The lender has agreed to let her borrow up to 75% of the total value of her home less the mortgage.How much can she borrow with a home equity loan?
A)$10,000
B)$40,000
C)$80,000
D)$90,000
E)$120,000

Question

Quizplus · Accepted Answer

First, calculate 75% of the home's value: 75% of $120,000 = $90,000. Then, subtract the mortgage balance: $90,000 - $80,000 = $10,000. This is the amount she can borrow with a home equity loan.

The Market Value of Karen's Home Is $120,000 and the Balance