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The Market Value of Your House Is $175,000 and You

question 31

Essay

The market value of your house is $175,000 and you have a first mortgage balance of $100,000.If a lender requires a 80% loan-to-market value ratio,how large could your home equity loan be?


Definitions:

Activity Levels

A measure used in cost accounting to evaluate the relation between the cost of a particular activity and the level of activity executed.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed versus variable costs a company has.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes towards covering fixed costs and generating profit.

Income from Operations

The earnings generated from a company's core business operations before subtracting interest and taxes.

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