Respuesta :
$96,000.00 is their equity at closing when the Smiths purchased their home for $200,000 with an LTV of 80%. They have repaid $27,000 of their original loan amount. They have just sold the home for $229,000.
200,000 * .8 = 160,000 - 27,000 = 133,000 229,000 - 133,000 = 96,000
Loan amount refers to the highest amount that a financial institution or a bank authorizes an applicant to borrow. The maximum loan amount is applicable to credit cards, standard loans, and line-of-credit accounts.
There are several factors that come into play when determining the maximum loan amount during the underwriting process. Usually, the maximum loan amount is recommended based on the borrower’s debt-to-income ratio. The ratio helps lenders determine the possibility of the borrower repaying the loan and the maximum loan amount that each borrower can access.
A higher debt-to-income ratio suggests a higher burden on the borrower when paying back the loan. Lenders prefer borrowers with a debt-to-income ratio of, at most, 36%. Risk diversification of a lender can also determine the maximum loan amount to be authorized. Other factors that are considered during the underwriting process include credit history and credit score.
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