If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 90%, then the borrower must make a:
A) minimum down payment of $10,000 plus closing costs.
B) minimum down payment of $10,000 including closing costs.
C) maximum down payment of $10,000 including closing costs and mortgage points.
D) maximum down payment of $10,000.
E) minimum down payment of $90,000 including closing costs.

Question

Quizplus · Accepted Answer

If the maximum loan-to-value ratio is 90%, then the borrower can borrow up to $90,000 (90% of $100,000). Therefore, the minimum down payment needed would be $10,000 ($100,000 - $90,000) plus any closing costs.

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