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

Question

Quizplus · Accepted Answer

If the maximum loan-to-value ratio is 90 percent, then the borrower can get a loan for up to $90,000. The remaining $10,000 plus closing costs must be covered by the borrower as a down payment. Therefore, the minimum down payment required is $10,000 plus closing costs.

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