A few years ago, simon powell purchased a home for $225,000. today, the home is worth $400,000. his remaining mortgage balance is $175,000. assuming that simon can borrow up to 75 percent of the market value, what is the maximum amount he can currently borrow against his home?

Question

Business

Josh Simmons

30 December, 13:45

A few years ago, simon powell purchased a home for $225,000. today, the home is worth $400,000. his remaining mortgage balance is $175,000. assuming that simon can borrow up to 75 percent of the market value, what is the maximum amount he can currently borrow against his home?

+4

Answers (1)

Know the Answer?

Gauge Middleton · Answer 1

To find Simon's maximum amount he can borrow against his home you will use the Home Loan Value Formula.

Home is worth: $400,000

Remaining balance: $175,000

Borrow: up to 75% on home

First, you'll want to take the market value of $400,000 and multiply it by 75% (.75) which gives you $300,000.

Then, you'll need to subtract what Simon owes on the home to find the amount he can borrow.

$300,000 - $175,000 = $125,000

Simon can borrow $125,000 against his home.