If a bank makes an 85% loan on a house valued at $120,000, how much cash is required at closing if the buyer already paid $8,000 earnest money?
Correct Answer
C) $10,000.00
Down payment = $120,000 × 15% = $18,000. Cash needed = $18,000 - $8,000 = $10,000
Why This Is the Correct Answer
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