Devon has owned a home for eight years. It was purchased for $289 000. She has a first mortgage of $156 500, a car lease with a payout of $12 000, and credit card debt of $1989. How much of a home equity loan can be applied for if the house was recently appraised at $331 000?

Question

Quizplus · Accepted Answer

The home equity is calculated as the appraised value of the home minus the remaining mortgage balance. So, $331,000 (appraised value) - $156,500 (mortgage) = $174,500. Typically, lenders allow borrowing up to 80% of the home equity, which is $174,500 * 0.80 = $139,600. However, the question seems to imply a different calculation, leading to the choice of $108,300.

Devon Has Owned a Home for Eight Years