Question 58

The minimum down payment is $13,875.

To determine the minimum down payment, we first need to calculate the loan amount based on the 85% loan-to-value ratio of the home’s appraised value. The loan amount is $78,125, which means the down payment is the difference between the appraised value and the loan amount, totaling $13,875.

A) 6166

This option represents an incorrect calculation of the down payment. A down payment of $6,166 would imply a loan amount exceeding the allowed 85% loan-to-value ratio based on the appraised value of $92,500.

B) 7862

This amount is also incorrect. A down payment of $7,862 would suggest a calculation that does not align with the required loan-to-value ratio, resulting in a loan amount that does not correspond with 85% of the appraised value.

C) 10882

This option is incorrect as well. A down payment of $10,882 would indicate a loan amount of $81,618, which is above the 85% ratio of the appraised home value, leading to an inaccurate calculation of the minimum down payment required.

D) 13875

This option is correct. With an appraised value of $92,500 and an 85% loan-to-value ratio, the loan amount is $78,125. Therefore, the minimum down payment is calculated as $92,500 - $78,125, equating to $13,875.

Conclusion

The correct minimum down payment of $13,875 is derived from the accurate calculation based on the 85% loan-to-value ratio. All other options fail to provide valid down payment amounts as they do not correctly correspond to the loan amount calculated from the appraised value. Thus, option D stands out as the only correct choice.