The Bank will provide a loan of up to 85% of the purchase of a property. Give n that the current savings amount is $90000, calculate the max. house price that can be afforded and hence the Bank can lend?

Guest May 23, 2017

#1**0 **

Since the Bank will finance 85% of the house, it therefore, follows that:

100% - 85% = 15% will be the down payment on the house. But we have:

If the full price of the house = H, then:

15%H = $90,000 which is the down payment. Or,

0.15H = $90,000 divide both sides by 0.15

H = $90,000 / 0.15

H = $600,000 full price of the house to be financed. But the Bank will finance 85% of it, therefore:

**$600,000 x 85%{=85/100} = $510,000 - the amount that the Bank will finance.**

Guest May 23, 2017