If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 80 percent,then the borrower must make a down payment of at least
A) $100,000.
B) $ 80,000.
C) $ 50,000.
D) $ 20,000.
E) none of these.

Question

Quizplus · Accepted Answer

A maximum loan-to-value ratio of 80 percent means that the lender will lend up to 80 percent of the property's value, which in this case is $80,000 ($100,000 x 80%). Therefore, the borrower must make a down payment of at least $20,000 ($100,000 - $80,000) to meet the 80 percent loan-to-value requirement.

If the Maximum Loan-To-Value Ratio That a Lender Will Accept