Ronald and Samantha Brady recently had their condominium in Port Isaac appraised for $321,600. The balance on their existing first mortgage is $154,920. If their bank is willing to loan up to 75% of the appraised value, what is the amount (in $) of credit available to the Bradys on a home equity line of credit?

To determine the amount of credit available to Ronald and Samantha Brady on a home equity line of credit (HELOC), we follow these steps:

1. **Calculate 75% of the appraised value of the condominium:**

\[ 75\% \text{ of } \$321,600 = 0.75 \times 321,600 = \$241,200 \]

2. **Subtract the balance of the existing first mortgage from this amount:**

\[ \text{Credit available} = \$241,200 - \$154,920 = \$86,280 \]

Therefore, the amount of credit available to the Bradys on a home equity line of credit is **$86,280**.

Would you like more details or have any questions about this calculation?

Here are 5 questions you might ask:
1. How does a home equity line of credit (HELOC) work?
2. What factors determine the maximum loan-to-value (LTV) ratio?
3. How is the appraised value of a property determined?
4. Can you explain the difference between a first mortgage and a HELOC?
5. What are the risks of taking out a HELOC?

**Tip:** When calculating available credit for a HELOC, always ensure that you correctly account for the current balance of any existing mortgages against the property.

Learn how to calculate the amount of credit available on a home equity line of credit (HELOC) using a real-world example. This problem involves calculating 75% of the appraised value of a property and subtracting the balance of an existing mortgage. Suitable for students and individuals interested in personal finance.

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