Acme Home Lending offers home equity loans up to 80% of the home value for its customers. If Sally Johnson has a home valued at $200,000 and a current mortgage of $50,000, how much can she borrow in a home equity loan from Acme?

Question

Quizplus · Accepted Answer

Sally Johnson's home equity is $200,000 - $50,000 = $150,000. Acme Home Lending offers loans up to 80% of the home value, so Sally can borrow up to 80% of $200,000, which is $160,000. However, she already has a mortgage of $50,000, so the maximum amount she can borrow in a home equity loan is $160,000 - $50,000 = $110,000. Therefore, option C is the correct answer.

Acme Home Lending Offers Home Equity Loans Up to 80