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23 April, 01:55

A lender determines that a homebuyer can afford to borrow $220,000 on a mortgage loan. The lender requires an 85% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount (to the nearest $1,000) ?

A: $187,000

B: $243,000

C: $254,000

D: $259,000

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  1. 23 April, 03:35
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    D: $259,000

    Explanation:

    The computation of the paying amount which borrower can pay for a property is shown below:

    = Mortgage loan amount for borrow : loan-to-value ratio

    = $220,000 : 85%

    = $258,823.53

    = $259,000 round off

    We simply divide the mortgage loan by the loan to value ratio so that paying amount could arrive which borrower can pay for a property.
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