About home equity lines of credit

Assignment Help Financial Management
Reference no: EM131893195

1. Read the information about home equity lines of credit. 

A. customer has a house that is appraised for $225,000 and has a current loan balance of $175,000.

a. How much equity does he/she have?

b. If the bank's loan guidelines state that you cannot exceed 85% LTV, how much can you borrow the customer?

2. A customer has a house with a tax assessed value of $325,000 and has a current loan balance of $228,000.

a. If the bank's loan guidelines state that you cannot exceed 75% LTV, how much can you borrow the customer?

b. If the bank's loan guidelines state that you cannot exceed 90% LTV, how much can you borrow the customer?

Reference no: EM131893195

Questions Cloud

Symbiosis between the bsm model and risk-neutral analysis : Explain the symbiosis between the BSM model and Risk -Neutral analysis. Why is this important beyond deriving the Black Scholes equation ?
What is the after-tax cash flow from selling it : What is the book value of the equipment? what is the after-tax cash flow from selling it?
Expected return on the market-what must risk-free rate be : A stock has an expected return of 13.1 percent, a beta of 1.28, and the expected return on the market is 11 percent. What must the risk-free rate be?
Cash flow if brisbane keeps using its current system : What is the Year 2 cash flow if Brisbane keeps using its current system? what is the net present value if Brisbane keeps using its current system?
About home equity lines of credit : If the bank's loan guidelines state that you cannot exceed 90% LTV, how much can you borrow the customer?
The internal rate of return method : Using the internal rate of return method, evaluate this project and indicate whether it should be undertaken.
Comparing capital budgeting projects : A project's net present value (NPV) is computed by discounting the cash inflows from the project and subtracting the investment (if conventional).
What is WCEs required rate of return now : What is WCE's required rate of return? what is WCE's required rate of return now?
What is the firm weighted average cost of capital : What is the firm's weighted average cost of capital? Which plan is optimal in terms of minimizing the weighted average cost of capital?

Reviews

Write a Review

Financial Management Questions & Answers

  Capital investment is expected to achieve long-term benefits

A capital investment is expected to achieve long-term benefits for the organization. These benefits generally fall into three categories. Identify and discuss these categories. Is there one category that seems to be more important than the others? Ar..

  Corresponding percent mark up based on the sale price

The percent mark up on a video game is known to be 108% based on cost. If the seller said $35 for one, then what would be the corresponding percent mark up based on the sale price?

  What is the value of gillette stock if firm cost of stock

What is the value of Gillette's stock if the firm's cost of stock is 8%? $15.07.

  What is the value of a european call option

What is the value of a European call option with an exercise price of $40 and a maturity date six months from now if the stock price is $28, the instantaneous variance of the stock price is .5, and the risk-free rate is 6%?

  Cost of capital will result in a decrease in projects irr

Other things held constant, an increase in the cost of capital will result in a decrease in a project's IRR. ESOPs were originally designed to help improve worker productivity, but today they are also used to help prevent hostile takeovers. Market ri..

  Contribute each year to retirement fund to reach his goals

How much will Jon need to contribute each year to his retirement fund to reach his goals?

  What was the standard deviation of returns for stock

what was the standard deviation of returns for stock A over this four year period?

  What is the after tax cost of capital to walgreen for bonds

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value bonds with a 15 year maturity at a price of $946 that carries a coupon interest rate of 12.3 percent that ..

  The firm has? short-term payables and trade credit

The firm has? short-term payables and trade credit that normally equal 10 percent of? sales, and it has no? long-term debt outstanding.

  Bonds outstanding with coupon rate

Union Local School District has bonds outstanding with a coupon rate of 3.7 percent paid semiannually and 15 years to maturity. The yield to maturity on these bonds is 4.3 percent and the bonds have a par value of $5,000. What is the dollar price of ..

  The cost of the additional cash discounts taken

In an effort to speed up the collection of receivables, Hill Publishing Company is considering increasing the size of its cash discount by changing its credit terms from “1/10, net 30” to “2/10, net 30”.

  Company marks up total cost

If the company marks up total cost by 0.59, what price should be charged if 62,000 units are expected to be sold?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd