If the maximum loan-to-value ratio that a lender will accept on a $100,000 home is 90 percent,then the borrower must make
A)a minimum down payment excluding closing costs of $10,000.
B)a minimum down payment including closing costs of $10,000.
C)closing costs plus points of $10,000.
D)a maximum down payment of $10,000.
E)none of these.

Question

Quizplus · Accepted Answer

The maximum loan-to-value ratio accepted by the lender is 90%, meaning they will only finance 90% of the home's value. Therefore, the borrower must make a down payment of at least 10% of the home's value, which in this case is $100,000, so the minimum down payment excluding closing costs would be $10,000.

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