Evelynn has home that was recently appraised for , and the balance on the existing mortgage is . If a bank is willing to loan up to of
the appraised value, calculate the potential amount of credit available on a home equity loan.
Select one:
a.
b.
c.
d.

To find the potential amount of credit available on a home equity loan, first calculate 75% of the appraised value of the home:

.

Then, subtract the balance on the existing mortgage:

.

So, the correct answer is © $6,900.

Now, let’s explore some captivating details!

Home equity loans can be a fabulous resource for tapping into the equity built up in your home. They can help homeowners finance anything from kid’s college tuition to that long-desired kitchen remodel, and they often come with lower interest rates compared to personal loans!

When considering a home equity loan, it’s vital to remember that while it offers a way to access cash, you’re using your home as collateral. This means that if you’re unable to repay the loan, you risk losing your home! It’s always a good idea to plan and budget carefully before taking on such financial commitments.