In a scenario where the combined loan-to-value (CLTV) is 75% and the second mortgage has a balance of $30,000, what is the amount of the first mortgage if the property is valued at $300,000?

In a scenario where the combined loan-to-value (CLTV) is 75% and the second mortgage has a balance of $30,000, what is the amount of the first mortgage if the property is valued at $300,000?

• A. $150,000
• B. $195,000
• C. $225,000
• D. $240,000

Answer: (B)

To determine the amount of the first mortgage in this scenario, it's important to understand the concept of Combined Loan-to-Value (CLTV), which is a ratio that compares the total amount of all mortgages on a property to its appraised value. In this case, the property is valued at $300,000 and the CLTV is 75%. Therefore, the total allowable mortgage amount is calculated by multiplying the property value by the CLTV percentage: Total mortgage amount = Property value x CLTV Total mortgage amount = $300,000 x 0.75 Total mortgage amount = $225,000 This figure represents the combined amount of the first and second mortgages. The second mortgage has a balance of $30,000, which needs to be subtracted from the total loan amount to find the amount of the first mortgage. First mortgage amount = Total mortgage amount - Second mortgage amount First mortgage amount = $225,000 - $30,000 First mortgage amount = $195,000 Thus, the first mortgage amount is correctly calculated to be $195,000, aligning with the answer provided. Understanding the CLTV calculation and how to break it down into individual mortgage components is essential for mortgage loan officers when assessing loan

To determine the amount of the first mortgage in this scenario, it's important to understand the concept of Combined Loan-to-Value (CLTV), which is a ratio that compares the total amount of all mortgages on a property to its appraised value.

In this case, the property is valued at $300,000 and the CLTV is 75%. Therefore, the total allowable mortgage amount is calculated by multiplying the property value by the CLTV percentage:

Total mortgage amount = Property value x CLTV

Total mortgage amount = $300,000 x 0.75

Total mortgage amount = $225,000

This figure represents the combined amount of the first and second mortgages. The second mortgage has a balance of $30,000, which needs to be subtracted from the total loan amount to find the amount of the first mortgage.

First mortgage amount = Total mortgage amount - Second mortgage amount

First mortgage amount = $225,000 - $30,000

First mortgage amount = $195,000

Thus, the first mortgage amount is correctly calculated to be $195,000, aligning with the answer provided. Understanding the CLTV calculation and how to break it down into individual mortgage components is essential for mortgage loan officers when assessing loan