contestada

Mr. and Mrs. Napper are interested in funding their children's college education by taking out a home equity loan in the amount of $24,000. Eldridge National Bank is willing to extend a loan, using the Napper's home as collateral. Their home has been appraised at $110,000, and Eldridge permits a customer to use no more than 70 percent of the appraised value of the home as a borrowing base. The Nappers still owe $60,000 on the first mortgage against their home.

(1) Is there enough residual value left in the Nappers’ home to support their loan request?

(2) How could the lender help them meet their credit needs? Show your works.

Respuesta :

Explanation:

Given that

Amount of equity loan = $24,000

Appraisal value of home = $110,000

Using percentage = 70%

Owed amount = $60,000

By considering the above information,

As we know that for the borrowing purpose, only 70% is eligible i.e

= $110,000 × 70%

= $77,000

So, the highest credit limit would be

= $77,000 - $60,000

= $17,000

So, there is no enough residual value left for $24,000 equity loan

2. By seeing the credit rating, income of a person, the lender could is willing to offer them additional amount i.e $7,000 that is come from subtracting the $17,000 from the $24,000 equity loan amount

Otras preguntas