If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:
A) $100,000.
B) $80,000.
C) $180,000.
D) $20,000.
E) $120,000.

Question

Quizplus · Accepted Answer

The maximum loan-to-value ratio is 80%, which means the lender will only finance 80% of the house cost. Therefore, the borrower must make a down payment of 20%, which is $20,000 in this case. This is the only option that is less than the total cost of the house and satisfies the requirements of the loan-to-value ratio.

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