A Texas homestead valued at $550,000 has a first mortgage of $310,000 and a home improvement loan of $20,000. The homeowner takes the maximum home equity loan and the lender charges the maximum 3% fee. What is the total of the fee plus 6 months of interest at 6% annual?
Correct Answer
C) $6,600
Max total = $550,000 × 0.80 = $440,000. Current = $310,000 + $20,000 = $330,000. Max HEL = $440,000 − $330,000 = $110,000. Fee = $110,000 × 0.03 = $3,300. Six months interest = $110,000 × 0.06 × (6/12) = $3,300. Total = $3,300 + $3,300 = $6,600.
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A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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A Texas reverse mortgage borrower has a homestead valued at $300,000 with no existing liens. Under the 80% LTV rule, the lender offers a reverse mortgage equal to 50% of the maximum allowed. How much will the borrower receive?
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A Texas homeowner's property is appraised at $280,000 with no existing liens. Under the Texas Constitution's 80% LTV rule, what is the maximum home equity loan?