Evelynn has home that was recently appraised for \( \$ 127,000 \), and the balance on the existing mortgage is \( \$ 88,350 \). If a bank is willing to loan up to \( 75 \% \) of the appraised value, calculate the potential amount of credit available on a home equity loan. Select one: a. \( \$ 2,550.00 \) b. \( \$ 8,650.00 \) c. \( \$ 6,900.00 \) d. \( \$ 70,900.00 \)

To find the potential amount of credit available on a home equity loan, first calculate 75% of the appraised value of the home: \( 75\% \text{ of } \$127,000 = 0.75 \times 127,000 = \$95,250 \). Then, subtract the balance on the existing mortgage: \( \$95,250 - \$88,350 = \$6,900 \). So, the correct answer is (c) \$6,900. Now, let's explore some captivating details! Home equity loans can be a fabulous resource for tapping into the equity built up in your home. They can help homeowners finance anything from kid's college tuition to that long-desired kitchen remodel, and they often come with lower interest rates compared to personal loans! When considering a home equity loan, it’s vital to remember that while it offers a way to access cash, you're using your home as collateral. This means that if you're unable to repay the loan, you risk losing your home! It’s always a good idea to plan and budget carefully before taking on such financial commitments.