California Real Estate Practice Exam

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How much would a purchaser need for a down payment to buy a house costing $330,000 with an 80% loan-to-value ratio offered by the bank?

$66,000
$64,000
$68,000
$70,000

The correct answer is: $66,000

A down payment of 20% (or $66,000) is required to secure the 80% loan-to-value ratio offered by the bank. This means that the bank will provide the remaining 80% of the cost of the house, which in this case would be $264,000. Option B, $64,000, is incorrect because this amount would only cover a loan-to-value ratio of 85%, leaving the purchaser to provide the remaining 15% as a down payment. Option C, $68,000, and Option D, $70,000, are incorrect because these amounts are above the 20% down payment requirement for the 80% loan-to-value ratio.