James and Sarah wish to buy a property that will be used for student lets. Assuming that they can find £40,000 from their own resources, what is the maximum sum that they can potentially borrow from thie lender, applying the standard percentage of loan to propertyvalue of 80%. The most important part I am looking for is the working out.
A £160,000
B £200,000
C £226,667
D £360,000
2007-11-10 02:34:28 · 4 answers · asked by theriskbasedapproach 1 in Business & Finance ➔ Renting & Real Estate
The down payment is 20%. Therefore £40,000 / .2 = £200,000 for the total purchase price and £160,000 for the mortgage. Your answer is A.
2007-11-10 02:46:35 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Deposit / 20 * 100 = Purchase Price
Purchase Price / 100 * 20 = Deposit Required
Purchase Price / 100 * 80 = Loan Required
Loan / 80 * 100 = Purchase Price
(and the above answer is A £160k borrowed, £40k deposit)
This reads like it is homework !
2007-11-11 03:13:12 · answer #2 · answered by mathias 1 · 0⤊ 0⤋
They could borrow £160,000 (4x £40,000) making the total purchase price £200,000
2007-11-10 02:45:01 · answer #3 · answered by Duffer 6 · 1⤊ 0⤋
£40,000 would be 20%, so multiply this by 4 to get 80%. So loan would be £180,000
2007-11-10 02:42:33 · answer #4 · answered by TRACI 2 · 0⤊ 1⤋