Humber/Ontario Real Estate Course 3 Exam Practice

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Given a mortgage default insurance premium of $3,500 at 1.75% of the loan amount on a loan that constitutes 84% of the lending value, what is the appraised lending value?

$200,000
$236,873
$238,095
$197,600
$220,000
$210,500

The correct answer is: $236,873

The correct answer is B. $236,873. To calculate the appraised lending value, we first need to determine the loan amount that corresponds to the mortgage default insurance premium. Since the premium is $3,500 and it represents 1.75% of the loan amount, we can calculate the loan amount as follows: $3,500 / 1.75% = $200,000 Now that we have the loan amount, which is $200,000, and we know it constitutes 84% of the lending value, we can calculate the lending value by dividing the loan amount by 84% and then multiplying by 100%: $200,000 / 84% * 100% = $236,873 Therefore, the appraised lending value is $236,873, which is option B.