A property appraises for $400,000. The borrower is getting an 80% first mortgage and a 15% second mortgage. If the lender requires a maximum CLTV of 95%, what is the maximum additional financing the borrower could obtain?
Correct Answer
A) $0
Current CLTV = (80% + 15%) = 95%, which already meets the maximum CLTV requirement of 95%. Therefore, no additional financing is possible without exceeding the lender's maximum CLTV ratio. This tests understanding that CLTV includes all liens against the property.
Why This Is the Correct Answer
Current CLTV = (80% + 15%) = 95%, which already meets the maximum CLTV requirement of 95%. Therefore, no additional financing is possible without exceeding the lender's maximum CLTV ratio. This tests understanding that CLTV includes all liens against the property.
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