What is the required down payment if the purchase price is $286,000 and the lender approves a loan-to-value ratio of 80%?

What is the required down payment if the purchase price is $286,000 and the lender approves a loan-to-value ratio of 80%?

• A. $21,440
• B. $53,600
• C. $8,000
• D. $5,440

Answer: (B)

To determine the required down payment based on the given purchase price of $286,000 and an 80% loan-to-value (LTV) ratio, first, you need to calculate the amount of the loan that the lender would provide. An 80% LTV means that the lender is willing to finance 80% of the home's purchase price. To calculate the loan amount, you multiply the purchase price by the LTV ratio: Loan amount = Purchase price × LTV Loan amount = $286,000 × 0.80 Loan amount = $228,800 Now, to find the down payment, subtract the loan amount from the purchase price: Down payment = Purchase price - Loan amount Down payment = $286,000 - $228,800 Down payment = $57,200 However, the options provided do not seem to include this amount, and it appears the closest figure relates to a scenario involving a down payment recalculation. Checking for needed calculations: If the down payment amount itself should directly tie to the LTV ratio, the down payment can also be considered the difference between the loan full purchase and loan amount: 1. Total purchase amount = $286,000 2. LTV

To determine the required down payment based on the given purchase price of $286,000 and an 80% loan-to-value (LTV) ratio, first, you need to calculate the amount of the loan that the lender would provide. An 80% LTV means that the lender is willing to finance 80% of the home's purchase price.

To calculate the loan amount, you multiply the purchase price by the LTV ratio:

Loan amount = Purchase price × LTV

Loan amount = $286,000 × 0.80

Loan amount = $228,800

Now, to find the down payment, subtract the loan amount from the purchase price:

Down payment = Purchase price - Loan amount

Down payment = $286,000 - $228,800

Down payment = $57,200

However, the options provided do not seem to include this amount, and it appears the closest figure relates to a scenario involving a down payment recalculation.

Checking for needed calculations:

If the down payment amount itself should directly tie to the LTV ratio, the down payment can also be considered the difference between the loan full purchase and loan amount:

1. Total purchase amount = $286,000

2. LTV