Question

You own a home that was recently appraised for $310,000. The balance on your existing mortgage is $125,450. If your bank is willing to loan up to 70% of the appraised value, what is the potential amount (in $) of credit available on a home equity loan?

Answer 1

Answer:

	Amount($)
Appraised Value	3,10,000
Bank willing to loan	70%
70% of Appraised Value	2,17,000
Existing Mortgage	1,25,450
Potential Amount of Credit available on home equity	91,550

Answer 2

The home equity loan amount:

1. Calculate 70% of the appraised value (maximum loan amount):

   $$\mathrm{\$}310,000\times 0.70=\mathrm{\$}217,000$$

3. Subtract the existing mortgage balance to find available credit:

   $$\mathrm{\$}217,000-\mathrm{\$}125,450=\boxed{{\displaystyle \mathrm{\$}91,550}}$$

Final Answer: The potential home equity loan available is $91,550