Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to the crazy increase in the housing market. When Sean purchased his home, he made the minimum required for a conventional mortgage. Since then, he has paid $30,000 down on his original mortgage. He is now ready to undertake some major renovations to his home and his bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current market value less his outstanding mortgage balance. What is the amount of credit that the bank is willing to provide Sean under a HELOC? $65,000 B. $50,000 $75,000 D. $30,000 E) $90,000
Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to the crazy increase in the housing market. When Sean purchased his home, he made the minimum required for a conventional mortgage. Since then, he has paid $30,000 down on his original mortgage. He is now ready to undertake some major renovations to his home and his bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current market value less his outstanding mortgage balance. What is the amount of credit that the bank is willing to provide Sean under a HELOC? $65,000 B. $50,000 $75,000 D. $30,000 E) $90,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to
the crazy increase in the housing market. When Sean purchased his home, he made the
minimum required for a conventional mortgage. Since then, he has paid S$30,000 down on his
original mortgage. He is now ready to undertake some major renovations to his home and his
bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current
market value less his outstanding mortgage balance. What is the amount of credit that the
bank is willing to provide Sean under a HELOC?
A
$65,000
B.
$50,000
$75,000
$30,000
$90,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15aa0cfb-6389-4e59-9f9d-0faf370b3388%2Febf7f536-15b4-48ca-be08-4e8d461f6abd%2F1w6m1m9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to
the crazy increase in the housing market. When Sean purchased his home, he made the
minimum required for a conventional mortgage. Since then, he has paid S$30,000 down on his
original mortgage. He is now ready to undertake some major renovations to his home and his
bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current
market value less his outstanding mortgage balance. What is the amount of credit that the
bank is willing to provide Sean under a HELOC?
A
$65,000
B.
$50,000
$75,000
$30,000
$90,000
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