If the Maximum Loan-To-Value Ratio That a Lender Will Accept

question 44

Multiple Choice

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 90 percent,then the borrower must make:

• A)a minimum down payment of $10,000 plus closing costs.
• B)a minimum down payment of $10,000 including closing costs .
• C)a maximum down payment of $10,000 including closing costs and mortgage points.
• D)a maximum down payment of $10,000.
• E)a minimum down payment of $90,000 including closing costs.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total taxable income, showing the share of income that goes to taxes.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of an additional dollar of earnings that will be paid in tax.

Average Tax Rate

The average tax rate is the portion of total income that is paid as taxes, calculated by dividing the total taxes paid by the total income.

State Tax Revenue

The income that a state government receives from taxation of individuals and businesses within its jurisdiction.