LTP Math
A 7-unit property renting fro $750 per unit each month in an area with a gross income multiplier of 110 has what value?
Gross Rent Multiplier = Sales Price / Annual Rent Annual Rent: $750 x 7 units x 12 months = $63,000 x 110 = $6,930,000
In order to calculate the area of a rectangular one-story ranch home, a broker would...
multiply length x width
A buyer purchased a property for $350,000 by obtaining an 80% LTV Conventional loan for 5.5% interest over 30 years. The property is subject to annual property taxes and insurance of $4,800. What is the buyer's PITI payment if the loan amortizes at 5.677, rounded to the nearest dollar?
$1,990 Loan Amount: $350,000 x 80% = $280,000 P&I Payment: $280,000 / 1,000 x 5.677 = $1,590 TI per month: $4,800 / 12 = $400 Monthly P&I: $1,590 + $400 = $1,990
A property is listed for $475,000 with Sell Fast Realty under an exclusive right to sell listing agreement. The seller has agreed to pay 7% on the first $150,000; 6% on the next $150,000; and 4% on the remainder of the sales price. How much commission will be earned by the selling firm if the property sells for $465,000 and compensation is split evenly between the listing and selling firms?
$13,050 Commission is based upon the sales price of $465,000 and calculated as follows: $150,000 x 7% = $10,500 $150,000 x 6% = $9,000 $165,000 x 4% = $6,600 Total commission: $26,100 which is split between 2 firms evenly, so $13,050
A buyer purchases a home for $180,000 and receives an 80% LTV loan at a 5.5% interest. What will the buyer pay for interim interest, when interest is paid in appears, the first mortgage payment is due November 1 and closing is scheduled for September 25th?
$132 Debit Buyer When calculating days, take 30 - the date of closing + 1 Loan Amount: $180,000 x 80% = 144,000 Daily Interest: $144,000 x 5.5% = $7,920 / 360 = $22 / day Days: 30 - 25 + 1 = 6 days Interim/Prepaid Interest Charge: $22 x 6 days = $132 debit to the buyer
A borrower is considering a 20-year loan at 7% that amortizes at 7.75 or a 30-year loan at 7 1/4% that amortizes at 6.82. What is the difference in the monthly payment if the purchase price is $200,000 and the buyer makes a 20% down payment?
$148.80 Monthly payments are calculated based upon the loan amount, not the purchase price Amount of loan: $200,000 x 80% = $160,000 Monthly payment is calculated by taking the loan amount, dividing by 1,000 and multiplying by amortization rate / factor. 20-year mortgage requires 240 payments (20x12), while 30-year requires 360 payments (30x12). 20-yr Payment: $160,000 / 1,000 x 7.75 = $1,240 30-yr Payment: $160,000 / 1,000 x 6.82 = $1,091.20 Monthly Payment Difference: $1,240 - $1,091.20 = $148.80
A seller would like to receive a minimum of $25,000 in net proceeds after closing. He currently owes a first mortgage of $128,000, estimated closing costs of roughly $2,500 and commission rate of 6%. What is the minimum he must sell his property to accomplish this goal (round to nearest dollar)?
$165,426 Sales Price Less Commission: 25,000 + 128,000 + 2,500 = $155,000 Sales Price Less Commission Percentage: SP 100% - Comm 6% = 94% Sales Price Needed: $155,500 / 94% = $164,426
A buyer asked her agent how much money she will owe at closing. The agent noted the purchase price of $265,000. The buyer sought a 90% LTV at 6% interest for the next 30 years. Property taxes are $985 and have not yet been paid and the buyer has agreed to pay after closing. Closing is November 22nd. The following expenses were paid by the customary party: - homeowner insurance costs $550 due in full at closing - mortgage insurance premium of $433 - home inspection cost $120 - pest inspection was $75 - courier fee to overnight the buyer's documents was $30 - excise tax is paid at the customary rate - commission is 7%. - recording fees are $90 - deed prep is $200 - interim interest The buyer also paid an earnest money deposit of $10,000. How much money is the agent likely to tell the buyer she owes?
$17,274.72 The buyer's debits include: $265,000.00 purchase price; $357.75 interim interest; $550.00 homeowner insurance; $433.00 mortgage insurance; $120.00 home inspection; $75.00 pest inspection; $30.00 courier fee; $90.00 recording fees. The buyer's credits include: $238,500 new loan; $881.03 property taxes from seller; $10,000 earnest money. The difference between the buyer's debits and credits is $17,274.72. Property Tax Proration: It is common for property taxes to be treated as a double debit when closing is after 9/1 and taxes are unpaid, however in this problem it states that the buyer will pay the bill after closing. To obtain the correct answer you need to calculate the seller number of days and the correct entry will be debit the seller / credit the buyer the same dollar amount. Buyer Days: (N) 8 + (D) 30 = 38 Seller Days: 360 - 38 = 322 Daily Rate: 985 / 360 = $2.7361 Tax Proration: 322 X 2.7361 = $881.03 Debit Seller / Credit Buyer Interim Interest: Interim interest will never be for more than 30 days. The buyer pays from the day of closing through the end of the month. Mortgage interest is paid in arrears, which means the buyer will have no payment in December, first payment in January and the January payment will pay December's interest. Don't fall for the testing trap of saying the buyer will make the first payment in January and then add in an additional 30 days of interest. Loan Amount: $265,000 X 90% LTV = $238,500 Days: 30 - 22 +1 = 9 Days Daily Interest: $238,000 X 6% / 360 = $39.75 Entry: $39.75 X 9 = $357.75 debit to buyer The choice $17,474.72 adds the deed preparation of $200 as a buyer debit however this is a seller responsibility to pay. The choice $17,234.97 calculates 8 interim days of interest instead of the appropriate 9 interim days. The choice $18,269.72 calculates the buyer's portion of the tax bill and includes it as a buyer debit even though the problem did not specify that the closing attorney was collecting respective shares.
A seller eagerly awaits closing and asked her agent how much money she will net tomorrow, April 4th. The listing agent noted the purchase price of $478,000. The seller has a remaining loan balance of $254,107.24. There is a quitclaim deed preparation of $225, commission of 5% and the tax bill is $3,579 is unpaid. The lender wants escrow deposits in the amount of 2 months worth of property taxes. The buyer previously paid $4,000 in earnest money. How much money does this seller net at closing?
$198,833.24 Commission: $478,000 x 5% = $23,900 $478,000 - $254,107.24 = $223,892.76 Property Tax Daily Rate: $3,579 / 360 = $9.9416 Days: (JFM) 90 + (A) 4 = 94 Entry: $9.9416 x 94 = $934.52 debit seller / credit buyer $223,892.76 - $23,900 Commission - $225 quitclaim - $934.52 property taxes = $198,833.24
A borrower owed $200,000 at the beginning of the month. How much will he owe after making a $1,200 PI payment on his 6% loan?
$199,800 Monthly Interest: $200,000 x 6% / 12 = $1,000 Principal Payment: $1,200 - $1,000 = $200 balance after 1 payment: $200,000 - $200 = $199,800
A commercial property sold for $6.5 million. The seller agreed to pay 7% commission of the first 2 million of sales price, 6% on the next 2 million of sales price and 4% of the remainder. How much commission does the seller owe?
$2,000,000 x 7% = $140,000 $2,000,000 x 6% = $120,000 $2,500,000 x 4% = $100,000 Total comp = $360,000
A broker receives 70% of the commission on a particular transaction with her firm receiving the remainder. On a recent transaction, the sale price was $240,000 and the total commission was 6% which was equally divided between the listing firm and the selling firm. How much did the broker's firm receive as a result of this transaction?
$2,160 Total Commission: $240,000 x 6% = $14,400 Commission Split Between Brokerages: $14,400 / 2 = $7,200 Firm Compensation: $7,200 x 30% = $2,160
A buyer is purchasing a property for $455,000 with a 30-year conventional loan at 6% requiring a 10% down payment. The amortization rate for the loan is 5.995. Property taxes and insurance total $4,200 per year. What is the monthly PITI payment?
$2,805 Mortgage payment is based upon the loan amount, not sales price Loan Amount: $455,000 x 90% LTV = $409,500 Monthly P&I: $409,500 / 1,000 x 5.995 = $2,455 Monthly TI: $4,200 / 12 = $350 Monthly PITI: $2,455 + $350 = $2,805
A broker is about to close on his first transaction and eagerly awaits the commission check, which he calculated to be $4,583. Knowing the commission was equally split between the listing firm and this broker's firm as well as this broker is on a 60/40 split, what must the sales price have been on this 7% total commission transaction?
$218,238.10 $4,583 / 60% = $7,638.33 The listing side and selling side equally split money, double $7,638.33 to reach $15,276.67 $15,276.67 / 7% = $218,238.10
An appraiser is trying to calculate the estimated market value of a property based upon the following information: Subject Comp 1 Comp 2 Comp 3 Sales Price $300,000 $315,000 $295,000 Bedrooms 3 3 3 3 Bathrooms 2 3 2 2 SQFT 2,000 1,900 2,100 1,900 What is the indicated estimate of market value, rounded to the nearest thousand?
$305,000 Step 1: Calculate value of a bathroom by comparing Comp 1 and Comp 3. $300,000 - $295,000 = $5,000 Step 2: Calculate value of square footage by comparing Comp 2 and Comp 3. $315,000 - $295,000 = $20,000 / 200 sqft = $100 per sqft Step 3: Make adjustments - recall comp superior = subtract / comp inferior = increase Comp 1: $300,000 - $5,000 + $10,000 = $305,000 The comp was superior, so we subtracted $5,000 for extra bathroom. The comp was inferior, so we increased by $10,000 for sqft (100 x $100) Comp 2: $315,000 - $10,000 = $305,000 The comp was superior so we subtract $10,000 for sqft. No adjustment for bathroom as they are the same Comp 3: $295,000 + $10,000 = $305,000 No adjustment for bathroom as they are the same. The comp was inferior, so we increased by $10,000 for sqft
A commercial property sold for $6.5 million. The seller agreed to pay 7% commission of the first 2 million of sales price, 6% on the next 2 million of sales price and 4% of the remainder. How much commission does the seller owe?
$360,000 $2,000,000 x 7% = $140,000 $2,000,000 x 6% = $120,000 $2,500,000 x 4% = $100,000
A buyer is paying $225,000 for a property, putting 15% down, paying 1% origination, 2 discount point and $3,000 in other buyer closing costs. The buyer paid $5,000 as an earnest money deposit. How much money will the buyer need to pay at closing?
$37,487.50 When buyer makes 15% down payment, that means they are obtaining an 85% LTV loan. Each discount point equates to 1% of the loan amount, so payment of 2 discount points equates to 2% of the loan amount Loan Amount: $225,000 x 85% = $191,250 Origination fee: $191,250 x 1% = $1,912.50 Discount points: $191,250 x 2% = $3,825 Cash needed to close: SP $225,000 - loan $191,250 + orig $1,912.50 + disc $3,825 + other CC $3,000 - EMD $5,000 = $37,487.50
An investor purchased a building for rental income. Two units rent for $750 per month and the remaining 4 rent for $925 per month. Vacancy rates are 3%. A property manager was hired at a 10% management fee and this person created an operating budget factoring in property taxes of $3,211, operating expenses of $5,000, debt service of $3,000 per month, and reserves of $8,000. What estimated NOI according to the operating budget?
$38,264,20 Potential Gross Income: $62,400 = (2 units x $750 + 4 units x $925) x 12 - vacancy and losses - $1,872 = EGI $60,528 - operating expenses - $22,263.80 = NOI $38,264.20
An investor purchased a building for rental income. Two units rent for $750 per month and remaining 4 rent for $925 per month. Vacancy rates are 3%. A property manager was hired at a 10% management fee and this person created an operating budget factoring in property taxes of $3,211, operating expenses of $5,000, debt service of $3,000 per month, and reserves of $8,000. What estimated NOI according to the operating budget?
$38,264.20 Gross Income - Vacancy & collection = effective gross income / total anticipate revenue - operating expenses = NOI $62,400 = (2 units x $750 + 4 units x $925) x 12 - vacancy and losses - $1,872 = EGI $60,528 - operating expenses - $22,263.8 = NOI $38,264.20
A seller wants to list his home for sale only if he can net $75,000 from the sale of the property in order to purchase a new home. He will agree to pay 6.5% commission to the listing firm, which will be divide equally between the listing and selling firms. He has a loan balance of $282,500 and the following expenses will be paid by the respective party: * Loan Origination fee $4,000 * Deed Preparation fee $150 * Closing Attorney fee $800 * Survey $400 * Home Warranty $550 * Other Seller Closing Costs $4,500 What is the sales price needed for the seller to achieve the desired net, rounded to the nearest thousand?
$387,000 Step 1: Add seller known expenses. Seller pays "C, D, and E"; commission, deed prep, and excise tax + mortgage satisfaction recording fees and the buyer pays remaining items unless otherwise stated $75,000 desired net + $282,500 loan payoff + $150 deed prep + $4,500 other sell CC = $362,150 Step 2: SP 100% - Commission 6.5% = 93.5% Step 3: Divide the seller known expenses by the percentage above to back into the sales price $362,150 / 93.5% = $387,326, rounded = $387,000
Homeowner association dues are $120 per month and paid in advance. If a property closes on June 20th and the HOA dues are current, how would the proration of HOA fees appear on the closing disclosure?
$40 debit buyer, credit seller Seller paid dues for the month. The buyer needs to reimburse seller. Seller pays through the day of closing Daily HOA Dues: 120 / 30 = $4/day Buyer Days: 30 - 20 = 10 Buyer HOA Dues: $4 x 10 = $40 debit - buyer, credit - seller
A borrower agreed to pay 3 discount points to lower the interest rate on her 30-year mortgage. She paid $12,000 to the lender. What is her loan amount, rounded to the nearest thousand?
$400,000 Loan amount x 3% = $12,000, so you can calculate the loan amount by dividing the discount points by 3% $12,000 / 0.03 = $400,000
A buyer purchases a property for $220,000, closing on November 13, and receives a loan at 80% LTV. The lender charges 1% for discount points and $875 in loan origination fee for the borrower's 4% mortgage loan. At closing, the attorney charges a $950 fee for closing, a $35 recording fee, and $250 for deed prep. The taxes on the property are $1,200 for the year and have been paid. Insurance of $600 will be paid for the first year and collected at the closing. The attorney will collect interim interest, a 6% commission, 2 months of taxes and insurance for the escrow account, and excise tax. The buyer has paid $2,000 as earnest money. How much should the buyer's agent prepare the buyer to bring to closing?
$47,029 SP $220,000 - Loan $176,000 + Discount Point $1,760 + Origination $875 + Attorney Fee $950 + Recording Fee $35 + Tax $156.67 + Insurance $600 + Interim Interest $352 + Escrow Insurance $100 + Escrow Tax $200 - Earnest Money $2,000 = $47,028.67 Loan: $220,000 x 80% = $176,000 Discount Points: $176,000 x 1% = $1,760 Prop Tax Proration: $1200 / 360 x 47 days = $156.67 debit buyer / credit seller Prop Tax Days - Buyer: N(17) + D(30) = 47 days Interim Interest Proration: $176,000 x 4% / 360 x 18 days = $352 Intermin Interest Days: 30 - 13 + 1 = 18 days
A buyer is consider a 30-year mortgage at 4% interest or a 25-year mortgage at 3.5% interest. The buyer will pay annual taxes and insurance of $3,600. What is the payment difference per month when the purchase price is $250,000, the buyer makes a 10% down payment and closing is scheduled for May 30th? 15-years 25-years 30-years Interest Rate: 3 1/2% 7.15 5.01 4.49 3 3/4% 7.27 5.14 4.63 4% 7.40 5.28 4.78 4 1/4% 7.53 5.42 4.92 4 1/2% 7.65 5.56 5.07
$51.75 Loan amount: $250,000 x 90% = $225,000 25-year loan monthly P&I payment: $225,000 / 1,000 x $5.01 = $1,127.50 30-year loan monthly P&I payment: $225,000 / 1,000 x $4.78 = $1,075.50 Monthly Payment Difference: $1,127.25 - $1,075.50 = $51.75
A seller recently sold her property for $615,000, which represents a 15% profit. What did she originally pay for her property, rounded to the nearest thousand?
$535,000 The new sales price is everything (100%) the seller initially paid, plus 15% more, for a total of 115% Original Purchase Price: $615,000 / 1.15 = $534,782.61
A buyer purchased a property for $225,000 by obtaining an 80% conventional mortgage at 5% interest for 30 years. The closing is scheduled for December 8th. What is the amount of interim interest due if the first months payment will be due February 1st?
$575 Interim or prepaid interest is only for the month. Mortgage interest is paid in arrears, meaning the first month a payment is due would be February, paying for January's interest Loan Amount: $225,000 x 80% LTV = $180,000 Days: 30 - 8 + 1 = 23 days Interim Interest: $180,000 x 5% / 360 x 23 = $575
A borrower seeks an 85% LTV ratio for a home he is under contract for at $348,000. The property under appraised at $340,000. According to the contract, how much money must the buyer bring to closing?
$59,000 Lenders compare contract price to appraised value and choose the lower between the two for loans. When the appraised value is lower, the buyer still owes however much extra the contract price is; in this case the contract price is $8,000 more. LTV is 85% of $340,000 meaning buyer will pay 15% $340,000 x 15% = $51,000 Add the $8,000 $59,000
Otto is purchasing a home for $293,000 with an assessed value equal to 80% of the purchase price. The local municipality charges 14 Mills. The closing is scheduled for October 19th and the taxes are unpaid for the year. The attorney will charge both the buyer and seller their portion of the taxes and pay it at closing. How much will the buyer pay if they agree to be responsible for the day of closing?
$656.32 Tax for year = Assessed Value / 1,000 X Mills Rate Assessed value = $293,000 x 80% = $234,000 Tax for year: $234,000 / 1,000 x 14 = $3281.60 Daily tax rate: $3281.60 / 360 = $9.1155 Buyer Days: making sure to add a day as the buyer agreed to be responsible for one extra day Oct. = 30 - 19 + 1 = 12, Nov + Dec = 60; total days 72 Tax to buyer: $9.1155 x 72 = $656.32
Aiden is purchasing a home for $150,000 by obtaining an 80% LTV Conventional loan at 4.5% interest for 25-years. Monthly property taxes and insurance are $240. Using the amortization chart what is Aiden's monthly principal and interest payment? AMORTIZATION CHART: Loan Term 15-Years 25-Years 30-Years Interest Rate: 4% 7.40 5.28 4.78 4.25% 7.53 5.42 4.92 4.5% 7.65 5.56 5.07 4.75% 7.78 5.71 5.22
$667.20 Loan Amount: $150,000 x 80% = $120,000 Monthly PI Payment: $120,000 / 1,000 x 5.56 = $667.20
Darwin will finance his house with a $195,750 loan at 5.25% interest. He wants to know what the difference in total interest paid over the life of the loan will be between a 20-year and a 30-year term, using the mortgage factor chart? Loan Term: 15-years 20-years 30-years Interest rates: 5 7.91 6.60 5.37 5 1/4 8.04 6.74 5.53 5 1/2 8.18 6.88 5.68 5 3/4 8.31 7.03 5.84 6 8.44 7.16 6.00
$73,053.60 5.25% interest for 20 years is 6.74 while the factor for 30 years is 5.53 Monthly PI for the 20 year term is $1,319.36 calculated as $195,750 / 1,000 x 6.74 Monthly PI for the 30 year term is $1,082.50 calculated as $195,750 / 1,000 x 5.53 Total interest for 20 year loan is $1,319.36 monthly PI x 240 total payments - $195,750 = $120,896.40 Total interest for 30 year loan is $1,082.50 monthly PI x 360 total payments - $195,750 = $193,950 Difference: $193,950 - $120,896.40 = $73,053.60
Sophie is trying to calculate the amount she would save in monthly payment by choosing a 30-year loan versus a 15-year loan. The purchase price is $380,000 with 90% LTV conventional loan. The 15-year loan is at a rate of 5.5% and the 30-year loan is at a rate of 6%. Using the amortization chart, what is the difference in monthly payment? Loan Term 15-years 25-years 30-years Interest rates: 5 7.91 5.85 5.37 5 1/2 8.18 6.15 5.68 6 8.44 6.44 6.00 6 1/2 8.71 6.75 6.32
$745.56 Loan amount: $380,000 x 90% = $342,000 15-year mortgage at 5.5% amortizes at 8.18 and a 30-year mortgage at 6% amortized at 6.00 15-year payment: $342,000 / 1,000 x 8.18 = $2,797.56 30-year payment: $342,000 / 1,000 x 6.00 = $2,052 Payment difference: $2,797.56 - $2,052 = $745.56
This year a tenant paid $56,000 in rent. Her percentage lease agreement stipulated that she pay $3,000 per month in fixed rent and 4 percent on all sales above $250,000. This year her gross sales were:
$750,000 Base rent: $3,000 x 12 months = $36,000 Percentage rent: $56,000 total rent - $36,000 base rent = $20,000 4% Sales: $20,000 / 4% = $500,000 Total Sales: $500,000 + $250,000 = $750,000
A buyer purchased a property for $375,000 by obtaining an 80% conventional loan at 6.5% interest for 30-years. Property taxes have been paid for the year by the seller for $2,880. The seller is responsible for the day of settlement. The buyer is obligated to pay $5,000 in closing costs. At the time of mortgage application the buyer paid $15 for a credit report and $400 for an appraisal. The annual property insurance of $700 is due at closing. The lender required the borrower to pay 4 months of taxes and 2 months of insurance into the escrow account. The buyer is required to pay interim interest to the lender. What is the cash due at closing, rounded to the nearest dollar from the buyer at settlement if closing is scheduled for September 23rd?
$82,396 When an item has been paid at mortgage application or outside closing, ignore. Sales price $375,000 - loan $300,000 + Taxes $776 + closing cost $5,000 + property insurance $700 + tax escrow $960 + insurance escrow $116.67 + interim interest $433.33 = buyer due $82,986 Property Tax: $2,880 / 360 x 97 days = $776 interim interest: $300,000 x 6.5% / 360 x 8 days = $433.33
If a property sold for $8,000 per front foot and is 83,200 sq ft total with a depth from the road of 800' then what is the indicated sales price?
$832,000 83,200 sq ft / 800' x $8,000 = $832,000
An investor wants a 6.75 yield on a loan product. The lender is offering this loan to a borrower at 6.25% and is charging 1% for the origination fee. How much will the borrower pay in loan fees if the loan amount is $195,000?
$9,750 The only way the lender can offer a loan at 6.25% given the investor wants 6.75% is if the buyer pays 4 discount points to reduce the interest rate by a total of 0.5%. The buyer will pay 1% of the loan for each discount point; for this example, the buyer will pay 4 discount points. Each discount point equals a 1/8 or .125% change in the interest rate. The loan origination fee is being charged at 1% of the loan and covers the expenses of the lender making the loan. The borrower needs to pay a total of 5% of the loan to cover the loan fees. $195,000 X 5% = $9,750
A tract of land measures 100 feet along the North side, 200 feet along the East and West sides and 100 feet along the South side. How many acres are in this tract of land?
0.459 100 ft x 200 ft = 20,000 sq ft Acre: 20,000 / 43,560 = 0.459
Lola's monthly debt service is $1,518.07. She purchased her house for $225,500 with an 88% LTV and 4.5% interest rate. Using the mortgage factor chart, what term is her loan for? 15-years 25-years 30-years Interest Rates: 4% 7.40 5.28 4.78 4.25% 7.53 5.42 4.92 4.5% 7.65 5.56 5.07 4.75% 7.78 5.71 5.22
15 year term $225,000 purchase price x 88% LTV = $198,440 loan amount / 1,000 = 198.44 x 7.65 = $1,518.07
A lender charged a borrower an origination fee of 1%. The borrower opted to pay two discount points to reduce the overall interest to 5.75% on her $368,000 loan. What is the yield to the lender?
6% Each discount point purchased reduces rate by 1/8th of a percent. Two discount points reduce rate by 1/4. Add 5.75% interest rate plus the 0.25% in discount points for a total yield of 6%
A buyer purchased a property for $85,000. The buyer later sold the property for $145,000. What was the buyer's percent of profit on this deal (round to nearest whole number)?
71% (New Value - Old Value) / Old Value 145,000 - 85,000 = 60,000 profit 60,000 / 85,000 = .7058 rounded to 71%
A provisional broker is contacted to list a property where the seller desires to net $100,000 from the sale of the property. The current mortgage balance is $175,000, commission of 6%, deed prep of $125 and other seller closing costs of $1,000. The closing attorney fee was $800. What must the property sell for in order for the seller to cover all expenses and net the desired amount, rounded to the nearest dollar?
Add seller's known expenses, mortgage balance, and desired net. Seller pays commission $100,000 + $175,000 + $125 + $1,000 = $276,125 Do not know sale price Sale price (100%) - commission rate (6%) = 94%. $276,125 / 94% = $293,750
Revenue stamps, also known as excise taxes are paid at $1 per $500. The sale price of the property is $250,000 with a loan amount of $200,000. What entry would be made on the settlement statement?
Debit Seller $500 Revenue stamps / excise tax are based on the sales price, not the loan amount and are typically paid by the seller Excise Tax: $250,000 / 500 = $500
A buyer is purchasing a property for $300,000 that is subject to homeowner association dues of $850 per year. The seller has paid for the year. What entry would be made on the settlement statement when closing is scheduled for April 5th, rounded to the nearest dollar?
Debit buyer $626 / Credit seller $626 Since the seller paid for the year, the entry will be debit the buyer / credit the seller for the same dollar amount of $626 Daily Rate: $850 / 360 = $2.3611 Seller Days: JFM (90) + A (5) = 95 Seller HOA Dues: $2.36111 x 95 = $224.31 Buyer amount: $850 - $224.31 = $625.69
A triplex rents for $1,750 per unit. All units are occupied, and the tenants paid rent by September 5th. What is the rent proration entry on the settlement statement if the closing is held on September 23rd rounded to the nearest dollar?
Debit the seller / Credit the buyer $1,225 Total Rent: $1,750 x 3 = $5,250 Daily Rent: $5,250 / 30 = $175 Buyer Days = 30 - 23 = 7 days Buyer Rent: $175 x 7 = $1,225
The borrower obtained a 30-year conventional mortgage loan at 5% interest and a prepayment penalty of 2% if the loan is paid off in 2-years. What would the borrowers monthly PI payment be if he purchased the home for $200,000 and made a 20% down payment, using the amortization chart below? Loan Term 15-Years 20-Years 30-Years Interest Rates: 5 7.91 6.60 5.37 5 1/4 8.04 6.74 5.53 5 1/2 8.18 6.88 5.68 5 3/4 8.31 7.03 5.84 6 8.44 7.16 6.00
Loan Amount: $200,000 x 80% LTV = $160,000 (sale price minus down payment) Monthly payment is calculated by taking loan amount, dividing by 1,000, the multiplying by mortgage factor. $160,000 / 1,000 x 5.37 = $859
Sophie is trying to calculate the amount she would save in monthly payment by choosing a 30-year loan versus a 15-year loan. The purchase price is $380,000 with 90% LTV conventional loan. The 15-year loan is at a rate of 5.5% and the 30-year loan is at a rate of 6%. Using the amortization chart below, what is the difference in monthly payment? AMORTIZATION CHART: Loan Term 15-years 20-Years 30-Years Interest Rate: 5 7.91 6.60 5.37 5 1/4 8.04 6.74 5.53 5 1/2 8.18 6.88 5.68 5 3/4 8.31 7.03 5.84 6 8.44 7.16 6.00
Loan Amount: $380,000 x 90% = $342,000 15-year mortgage at 5.5% amortizes at 8.18 and a 30-year mortgage at 6% amortized at 6.00. Mortgage Payment: Loan / 1,000 x Factor 15-Year Payment: $342,000 / 1,000 x 8.18 = $2,797.56 30-Year Payment: $342,000 / 1,000 x 6.00 = $2,052 Payment Diff: $2,797.56 - $2,052 = $745.56
A property measures 400 x 300 and sells for $200,000. Which of the following is TRUE?
Property sold for $500 per front foot 400 x 300 / 43,560 = 2.7548 price per acre $200,000 / 2.7548 = $72,600 price per sq ft 400 x 300 = 120,000 $200,000 / 120,000 = $1.67
A commercial lot rents for $5,000 per month and recently sold for $1,500,000. The lot measures 1,000' X 900'. Which of the following statements is corect?
The property sold for $1,500 per front foot The first call number is the front footage when given the length X width dimensions of a lot *Sales Price Per Front Foot: $1,500,000 / 1,000 = $1,500* Square Footage: 1,000 X 900 = 900,000 Price Per Square Foot: $1,500,000 / 900,000 = $1.6667 Total Acreage: 900,000 / 43,560 = 20.6611 acres Sales Price Per Acre: $1,500,000 / 20.6611 = $72,600 Annual Rent: $5,000 X 12 = $60,000 Gross Income Multiplier: $1,500,000 / $60,000 = 25 The gross rent multiplier is 300 (SP $1,500,000 / $5,000 monthly rent)
A buyer is purchasing a property for $380,000 with settlement scheduled for May 28. The seller has not paid annual property taxes of $4,200. The buyer agrees to pay the bill when they become due. What is the entry on the settlement statement to prorate taxes between the buyer and seller?
When closing is before 9/1 and taxes are unpaid you would debit the seller / credit the buyer for the seller number of days Seller days: (JFMA) 120 + (M) 28 = 148 Daily Rate of Taxes: $4,200 / 360 = $11.6667 Seller Taxes: $11.6667 x 148 = $1,726.67 Debit Seller $1,726.67 / Credit Buyer $1,726.67