NCPQ

What would be the fixed level payment on the following $166,791.61 loan? - Level payments - 360 months - 8% per year

$1,223.86

The bank lends a person $100,000 through a 15-year fixed rate mortgage with an interest rate of 6%. If the mortgage was to be paid (and was compounded) monthly, the calculator entry for "N" would be

180

Suppose your friend needs to borrow money to invest in real estate, and you are deciding whether or not to lend them the money. Your friend promises to return the money in a lump sum 20 years from now, along with a lump sum of $100,000 in interest (a total of $110,000 as a lump sum payment.) What is the Present Value of this investment at a 12% required rate of return?

$11,403.34

Suppose you are looking to take out a $500,000, 30-year 5/1 ARM that is fully amortized with monthly payments. The initial annual rate of 5.4% is locked in for three years, then the rate will adjust at the beginning of each year thereafter. What is the monthly payment in the fourth year, assuming the interest rate (index plus margin) is 160 basis points above the initial annual interest rate?

$3,289.54 NUMBER 8 ON PAPER

Suppose you have a $100,000 fixed-rate level-payment mortgage as follows. What is the ending balance of the loan after the first monthly payment? - 15 year amortized term - 6% annual interest

$99,656.14

The purchase price of an income-producing property today is $1,300,000. After analysis of the expected future cash flows, expected sales price, and expected yield, the investor determines that the future cash flows have a present value (PV) of $1,280,000. Taking into consideration the price of the property today, what is the net present value (NPV) of this investment opportunity, and should the investor take the deal?

-$20,000; No

If you were offered an investment that paid out exactly $4,000 each year for 10 years, and at the end of the 10th year paid an extra lump sum amount of $24,000, which of the following calculations would suffice to find present value (PV)

-Find the PVs of the eleven different cash flows and sum the results. -Use the equation for PV of an annuity to value the $4,000 payments, and then use the equation for PV of a lump sum to value the $24,000; then add the two results together. -Solve using a financial calculator and use all five TVM buttons

For standard adjustable rate mortgage (ARM) loans, the average industry margin has been stable at approximately 275 basis points (and as low as 225). 275 basis points is the same as the number

.0275

The equation above is for the Mortgage Constant. What is the Mortgage Constant for a fixed-rate (level monthly payment) loan with a 30 year term at a 6% annual interest rate? Hint: using this Mortgage Constant would give you about a $900 payment on a $150,112.46 loan.

0.00599550

Suppose a potential home buyer is interested in taking a $200,000 mortgage loan that has a term of 15 years and a fixed mortgage rate of 5.15%. What is the monthly mortgage payment that the homeowner would need to make if this loan is fully amortizing? Enter the answer below as a positive number, no dollar sign, and two decimal places.

1,597.26

Suppose you have taken out a $425,000 fully amortizing fixed rate mortgage loan that has a term of 30 years and an interest rate of 5.5%. In month 70 of the mortgage, how much of the monthly mortgage payment does the interest portion consist of? Enter the answer below as a positive number, no dollar sign, and two decimal places. Enter the answer below as a positive number, no dollar sign, and two decimals.

1,775

An investor agreed to sell a warehouse five years from now to the tenant who currently rents the space. The tenant will continue to pay $10,000 rent at the end of each year including year 5 in which he will purchase the building for an additional $120,000. Assuming the investor's required rate of return is 10%, how much is this deal presently worth to the investor who was willing to sell? Enter the answer below as a positive number, no dollar sign, and two decimals.

112,418

Suppose your friend needs exactly $10,000 to invest in real estate, and you are deciding whether or not to lend them the money. You learned about net present value as a decision making tool, and want to put it to use. Your friend promises to return the money in a lump sum 20 years from now, along with a lump sum of $100,000 in interest (a total of $110,000.) You believe you could gain an annual return of 12% through similar-risk alternative investments over that same 20 years. What is the Net Present Value of your friend's proposal? Enter a whole number below, with no dollar sign (no "$"), rounding to the nearest whole number, and using the "-" sign if negative, but no sign if positive. Commas, as always, are optional

1403

A buyer wants to purchase a home valued at $187,500, and the bank informs the buyer that if they take a loan over 80% in LTV, they need to budget for PMI payments. If the buyer wants to avoid PMI, what is the maximum amount of the loan they can take? Enter the answer below as a positive number, no dollar sign, and two decimals.

150,000

What would the value of these payments be to a lender who can earn 6% annual interest on other loans? - 30 years of monthly payments (360 payments) - $1,000 each payment

166,791.61

Given the following information on an interest-only mortgage, calculate the monthly mortgage payment: loan amount: $50,000; term: 15 years; interest rate: 4.2% Enter the answer below as a positive number, no dollar sign, and two decimal places.

175

Suppose you have taken out a $425,000 fully amortizing fixed rate mortgage loan that has a term of 30 years and an interest rate of 5.5%. How much principal do you pay down in the entire 23rd year of the loan? Enter the answer below as a positive number, no dollar sign, and two decimal places

19,146.13

You have taken out a $400,000, 5/1 ARM with monthly payments. The initial rate of 4.8% (annual) is locked in for five years. The interest rate after the initial lock period (including index and margin) is 6.0% (note: the term on this 5/1 ARM is 30 years.) What is the monthly payment after recasting the loan (i.e., after the reset in the sixth year?) Hint...while this question seems advanced, you should be able to find the balance at the beginning of year 6 (the new PV when the new loan interest rate takes place.) After that, you have all the information to recalculate payment...keeping in mind there are no longer 30 years left on the loan. Enter the answer below as a positive number, no dollar sign, and two decimal places

2,359.82

Given the following information, determine the value of having an additional bathroom. Assume that the comparable properties are similar in all other attributes besides those listed in the table below. Comp # Sq.Ft. Time of Sale Bathrooms Sales Price 1 4,000 Last Year 4 $220,000 2 5,000 Today 4 $280,000 3 4,000 Last Year 3 $200,000 4 4,000 Today 4 $210,000

20,000

An investor agreed to sell a warehouse ten years from now to the tenant who currently rents the space. The tenant will continue to pay $25,000 rent at the end of each year for the first nine years, then will not pay rent, but will purchase the building for $175,000 at the end of year ten. Assuming the investor's required rate of return is7%, how much is this deal presently worth to the investor who was willing to sell?

251,841.93 NUMBER 3

Added to the index of the adjustable rate is a margin, which is the lender's markup. For standard adjustable rate mortgage (ARM) loans, the average industry margin has been stable at approximately ___ basis points.

275

What would the value of these monthly payments be to a lender who can earn 6% annually on other loans? - 180 level payments - $2,500 each

296,258.79

The most popular type of mortgage in the United States is the

30-Year Fixed-Rate Fully-Amortized Mortgage

Suppose you have taken out a $425,000 fully amortizing fixed rate mortgage loan that has a term of 30 years and an interest rate of 5.5%. What is the mortgage balance at the end of the 2nd year? Enter the answer below as a positive number, no dollar sign, and two decimal places.

413,226.80

What would be the fixed level payment on the following $100,000 loan? - 15 years - monthly payments - 6% annual rate

843.86

Value of a property depends on all but which of the following?

Calendar dates of expected cash flows

If only one payment in a long series of annuity cash flows is slightly higher than all the rest, the internal rate of return (IRR) will still be accurate by solving by the "I/Y" button on the calculator.

False

The difference between the current market value of a building and the total cost to reproduce it new could be related to changes in tastes, preferences, technical innovations, or market standards. This is commonly referred to as external obsolescence.

False

When a mortgage originator decides to sell mortgages to another institution, this transaction occurs in what is commonly referred to as the primary mortgage market.

False

You are a borrower, and take a $500,000 fixed -rate, 15 -year fully -amortizing loan with monthly payments. The lender lowers your interest rate to 5.00% annually due to you paying points equal to 2% of the full loan amount ($10,000 in points). You will pay no other up -front fees directly to the lender, but the lender requires you to pay for an appraisal (paid to appraiser) of $1,000. They also require that you pay for the lender's title insurance (paid to title insurance company) of $3,000. If you pay back the loan at the end of the third year with no pre -payment penalty..

Lender Yield = 5.78% (rounded to two decimal places) • A: EBC = 6.10% (rounded to two decimal places)

When you, as a borrower sign the "mortgage" (conveying to the lender a security interest in the mortgaged property) you are the

Mortgagor

Given the following information on a fixed-rate fully amortizing loan, determine the maximum amount that the lender will be will ing to provide to the borrower: loan term: 30 years; monthly payment: $1650; interest rate: 8%

Present Value of Mortgage Payments (Max Loan Amount). AKA: Ordinary Annuity •224,867.77 Then , without clearing TVM, what is the: • Interest paid over the life of the loan? • A: 369,132.23 • Interest paid in year 21? • A: 10,545.18 • Interest paid through year 16? • A: 258,377.28 • Balance at the end of year 3? • A: 218,751.70 • Principal paid in only the 182 nd month? • A: 502.28

Given the following information, what adjustment would need to be made to account for the number of bedrooms between the subject property and comparable property? Adjustments Market conditions Market trend improved, so adjust -0.50% (per past month) Lot size $25,000 (per acre) Effective age (years) -$1,000 (per year) Living area (sq. ft) $45.00 (per sq. ft.) Bath $1,250 (per bath) Bedrooms $3,000 (per bedroom) Subject Prop. Comp. Prop. Time Sold Today 4 Months Ago Lot size (ac.) 0.72 0.80 Effective age (years) 6 9 Living area (sqft) 2,197 2,383 Bath 2.5 2.5 Bedrooms 6 3 Sales Price - $488,000

The price of the comparable property must be adjusted upward by $9,000

Interest Rate, Required Return, (Required) Rate of Return, Opportunity Cost, and Discount Rate are essentially the same concepts, and all deal with risk-adjustment.

True

Which of the following clauses requires a borrower to make monthly deposits into an account in order to pay obligations such as property taxes, community association fees, or causality insurance premiums?

escrow clause

The sequence of adjustments to the transaction price of a comparable property would make no difference if all adjustments were dollar adjustments. However, if percentage adjustments are involved then the sequence does matter. In making adjustments to a comparable property to arrive at a final adjusted sales price, the proper sequence for the following adjustments would be

financing terms, market conditions, location

In the Pinckney Street case study, full-time tech-industry worker, Lee, believes he has come up with a viable apartment building real estate investment plan. While money is forecasted to be tight, he tells his attorney that he plans to save on expenses by:

he would serve as the general contractor during construction.

In real estate markets, a transaction occurs only when the investment value of the buyer exceeds the investment value of the seller. The seller's investment value is the ________ that he or she would be willing to accept for a particular property, while the buyer's investment value is the ________ that he or she would be willing to pay.

minimum; maximum

Standard mortgage loans require monthly payments typically composed of two components: interest and principal repayments. When scheduled mortgage payments are insufficient to pay all of the accumulating interest, causing some interest to be added to the outstanding balance after each payment shortfall, the loan is said to be

negatively amortizing

The cost approach to valuation would most likely be the primary valuation method used for which of the following properties?

public elementary school

In the Pinckney Case, Lee met with a lender whom required that he and his wife be personally liable in the event of a default. Such loans are commonly referred to as

recourse loans.