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Your client Faye is buying a condo downtown for $565,000 and financing 60% of the purchase. Her lender is charging a one-point loan origination fee and two discount points. Can you help Faye calculate the dollar amount for points she's going to pay on her loan? $10,170 $16,950 $4,520 $6,780

$10,170 A point is 1% of the loan amount. Faye's loan amount is 60% of the sales price, or $339,000 ($565,000 x 0.60). Her lender is charging three points total, or 3% of the loan amount. That comes out to $10,170 ($339,000 x 0.03).

Simi is a buyer's agent, and she'll receive a split of the commission paid from the sale of Tanner's listing. The property sold for $425,000. The total commission paid from the sale is 6% split evenly between the buyer's and seller's brokerages. Simi has an agreement to give her broker 20% of the commission she receives. How much will Simi be paid from this sale? $10,200 $12,750 $20,400 $25,500

$10,200 The total commission paid is $25,500 ($425,000 × .06). Half of this is paid to Simi's brokerage ($12,750). Of that, Simi gets 80% ($10,200)

If Hal sold his client's listing for $230,000, but it appraised at $200,000 and the buyers agreed to put the extra $30,000 down, what will Hal's commission be if he charged 5%? $10,000 $11,500 $13,500 $16,000

$11,500 Sales price × commission rate = commission. So, in this case: $230,000 × 5% = $11,500.

Bradley listed a house at an 8% commission rate, and it just sold for $723,500. His firm and the buyer's agent's firm split the commission equally between them. Then Bradley, who has a 50/50 commission split with his broker, took his check to the bank. How much did Bradley earn from this transaction? $13,980 $14,470 $14,840 $15,006

$14,470 The total commission from the sale was $57,880 ($723,500 × .08). After splitting that with the buyer's broker, Bradley's firm's share is $28,940 ($57,880 ÷ 2). Bradley's 50% share of the firm's commission works out to $14,470 ($28,940 × .50)

Your clients have been in their home for seven years, have made $12,000 of improvements, and have $130,000 left on their mortgage. The home recently appraised for $283,000. Using these figures, how much equity do they have in the property? $118,000 $123,000 $153,000 $165,000

$153,000 Your clients have $153,000 equity in their property. Money used for improvements isn't part of the equity calculation. Equity is calculated by subtracting the amount of debt still owed on the mortgage from the appraised value.

Cheryl and Roberto just signed a contract for Cheryl to buy Roberto's house for $235,000. Roberto owes $48,750 on his current mortgage, he's going to replace the old furnace ($800), he's agreed to pay 3% toward closing costs, and he'll pay a 6% commission to his agent. How much in whole dollars will he have left to put down on the condo he wants to buy? $164,300 $164,771 $167,696 $168, 688

$164,300 Roberto's closing costs will be $7,050 ($235,000 x 0.03) and commission will be $14,100 ($235,000 x 0.06). If you subtract all the costs given ($7,050, $14,100, plus the $800 furnace, and the $48,750 mortgage payoff) from the $235,000 price, you end up with $164,300.

Your buyer client Heather just signed a purchase agreement for a $520,000 home. The LTVR is 60%. How much is Heather putting down on the purchase? $208,000 $220,000 $300,000 $312,000

$208,000 A 60% LTVR means that Heather is financing 60% of her purchase and putting down 40%. Forty percent of $520,000 is $208,000 ($520,000 x 0.40)

Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier's check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What's the condo's purchase price in whole dollars? $132,500 $265,000 $344,500 $88,333

$265,000 Subtract the closing costs from cashier's check amount ($34,450 - $7,950=$26,500) for half of down payment. The total DP was double this ($53,000). Next, divide $53,000 by 20% (to find purchase price ($53,000 ÷ .2=$265,000). Purchase price is $265,000.

A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell? $250,000 $265,957 $276,596 $650,000

$276,596 To calculate this, start with 100% minus a 6% commission, which is 94% or .94. Take $250,000 plus $10,000 and divide this amount by .94.

Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax? $29.37 $293.70 $58.74 $587.40

$293.70 The total transfer tax is $587.40 ($178,000 x .0033), so they each pay $293.70 ($587.40 ÷ 2)

The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn't made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar. $151 $242 $298 $449

$298 The seller owes $298. The seller owns the property for 242 days of the year, and 242 days × $1.23 = $297.66, or $298 if rounded to the nearest whole dollar.

Bob and Mary are financing $180,500 for a new home. Their lender will approve an interest rate of 5% if Bob and Mary pay two discount points at closing. How much will this cost them? $180.50 $32,000 $3,610 $9,025

$3,610 A discount point is 1% of the loan amount. Bob and Mary are paying two points (or 2% of $180,500), which is $3,610.

Your clients Earnestine and Sammie Griffin are financing $180,970 for a $500,000 home. The Griffin's lender will approve an interest rate of 4.5% if they pay two discount points at closing. How much is this? $10,000 $3,619.40 $6,380.60 $8,143.65

$3,619.40 A discount point is 1% of the loan amount. Earnestine and Sammie are paying two points (or 2%) of $180,970, which is $3,619.40. To find how much equity she has, subtract the amount she still owes on her mortgage from the appraised value.

A buyer is purchasing a property for $400,000. His lender's loan-to-value ratio is 80%. How much is the buyer financing? $320,000 $360,000 $400,000 $80,000

$320,000 An 80% LTV ratio means the buyer is financing 80% of the purchase price. This equates to $320,000.

If your latest listing sells for list price, the seller will pay $25,500 in commission. If your rate is 7.5%, what's the home's list price? $115,000 $195,000 $265,000 $340,000

$340,000 To find the sales price, divide the commission by the commission rate: $25,500 ÷ 0.075 = $340,000.

The lender will charge a one-and-a-half-point origination fee and two loan discount points. What will be the total due for points on a $115,000 loan? $1,725 $2,300 $4,025 $575

$4,025 A point is 1% of the loan amount. Three-and-a-half points (one-and-a-half and two) is 3.5% of $115,000, or $115,000 x .035 = $4,025

An annual insurance premium is $500. What's the monthly insurance payment? $21.83 $37.74 $41.67 $43.35

$41.67 Divide the annual premium by 12 to get the monthly amount. $500/12=$41.67.

The Walton family got a great deal on their new home. They bought it for $101,295, and it appraised at $187,000 in a region where assessed value is a percentage of appraised value. Using an assessment ratio of 25%, what is the assessed value of their new home? $21,246 $25,323 $46,750 $52,753

$46,750 Assessed value is based on the appraised value of the home. So, in this case, $187,000 × 0.25 = $46,750.

Amy is purchasing a $500,000 property, financing $400,000. Assuming a mortgage recording tax rate of $0.115 per $100, what's the mortgage recording tax amount? $460 $4,600 $750 $7,500

$460 At a rate of $0.115 per $100, the tax amount is $460. Remember, this tax only applies to the financed amount, not the sales price.

Whitney and Justin are about to close on their refinance, and their loan amount is $362,000. They are paying a 1.5% origination fee. How much will their origination fee be? $1,500 $5,100 $5,430 $6,200

$5,430 Whitney and Justin will pay $5,430 for their loan origination fee ($362,000 x 1.5% or .015)

Jamal is selling his townhome for $242,000, and closing is set for July 20. He has a loan balance of $193,000 at a 3.7% interest rate, and he's current on his payments. Jamal has prepaid the property taxes ($1,165) and insurance ($745). Using a calendar year proration method for calculations, how will these amounts appear on Jamal's closing statement? $523.16 seller credit $523.16 seller debit $798.89 seller credit $872.45 seller credit

$523.16 seller credit First, calculate tax daily rates: ($1,165 ÷ 365 days per year = $3.19). Multiply $3.19 × 164 days from closing until year end = a $523.16 seller credit. Remember that insurance is typically repaid by the insurance company directly to the seller, so it doesn't factor into the transaction between the buyer and seller

Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment? $35,025 $54,150 $57,000 $62,100

$54,150 Lenore's offer is $270,750 which is 95% of the list price ($285,000 x .95 = $270,750 ). Her total down payment is 20% of her accepted offer of $270,750, which is $54,150 (or $270,750 x .2).

Lola recently sold her house for $767,600. The loan balance when she sold it was $179,500. What was Lola's equity? $170,500 $260,400 $327,700 $588,100

$588,100 Lola's equity was $588,100. Subtract the loan balance from the market value of the home to find the equity ($767,600 - $179,500 = 588,100).

A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What's the amount of the loan origination fee if the lender charges one-and-a-half points? $5,000 $6,750 $750 $7,500

$6,750 The amount paid for points = loan amount × number of points. The buyer is financing $450,000 ($500,000-$50,000). Multiply the loan amount of $450,000 by 1.5% (or 0.015) to get $6,750.

If you sell a home for $143,000, and your commission rate is 5%, what is your commission on the sale of this home? $7,150 $7,500 $8,580 $9,440

$7,150 Commission = sales price × commission rate: $143,000 × .05 = $7,150.

A homeowner has $80,000 of principal left to pay on her mortgage. Her home was recently appraised at $156,000, which is $13,000 more than what she purchased it for. How much equity does she have in her home? 100% $13,000 $76,000 $80,000

$76,000 To find how much equity she has, subtract the amount she still owes on her mortgage from the appraised value.

If the annual taxes on a property are $1,000, how much is paid monthly? $67.82 $76.54 $83.33 $84.27

$83.33 Divide annual tax amount by 12 to get the monthly amount. $1,000/12=$83.33.

Amy is purchasing a property for $370,000. Amy's financing $150,000, and she and her agent negotiate to split the transfer tax with the seller. What will the seller pay in transfer tax if the rate is 46 cents per $100? $1702 $17,020 $851 $8,510

$851 Remember, this tax applies to the sales price, not the financed amount. At a rate of 46 cents per $100, the total transfer tax amount is $1,702 ($370,000 × .0046), so they each pay $851 ($1,702 ÷ 2).

Alistair bought a townhouse for $285,900. He got a 90% loan and the lender charged him 3-1/2 discount points. How much did Alistair pay in discount points? $1,000.65 $10,006.50 $9,005.85 $9,585.00

$9,005.85 The sales price is $285,900, and 90% of that (aka our loan amount) is $257,310. The discount amount is 3-1/2 points, (.035) multiplied by $257,310 = $9,005.85.

Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax $1,137.50 $1,662.50 $700 $962.50

$962.50 A mortgage recording tax is based on the loan amount. Phyllis will pay a mortgage tax amount of $962.50 on her loan amount ($275,000 x .0035).

The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay? .017 .02 1.71 1.8

1.71 A point is 1% of the loan amount. The Smithwicks' loan is $360,000 ($400,000 x .90), and they paid $6,150 for points at closing. Divide the cost into points by the loan amount to get the number of points they paid: ($6,150 ÷ 360,000 = 0.0170833, or 1.71). Also, remember to round off calculations.

Your buyer clients, the Fowlers, obtained an 80% loan on their $600,000 home. At closing, they paid $8,250 for points. How many points did the Fowlers pay to lower their interest rate? 0.017 1.17 1.72 7.2

1.72 The Fowler's loan is $480,000 ($600,000 × .80), and they paid $8,250 for points at closing. A point is 1% of the loan amount. Divide the cost in points by the loan amount to get the number of points they paid: ($8,250 ÷ 480,000 = 0.0171875, or 1.72).

Which of the following options describes principal as it relates to loans? 1 Amount of payment that will be applied to the interest 2 Amount of payment that will be applied to the loan balance 3 Amount to be sent as payment each month 4 Loan balance before the monthly payment is applied

2 Amount of payment that will be applied to the loan balance The principal is the amount of payment that will be applied to the loan balance. The interest is the amount paid to borrow the money.

Seller Garrett has a closing date of October 11. He's already paid his annual taxes of $1,825. Assuming the buyer owns the day of closing and assuming a calendar year proration, which of the following statements is true regarding the property tax proration? 1 Garrett will be credited $1,825 at closing. 2 Garrett will be credited $410 at closing. 3 Garrett will be debited $1,415 at closing. 4 Garrett will be debited $410 at closing.

2 Garrett will be credited $410 at closing. Here are the calculations: $1,825 ÷ 365 = $5.00, which is the daily rate for the taxes. Garrett will own the property for 283 days, so he's responsible for $1,415 of the tax bill. Because Garrett already paid the entire tax bill, the buyer will reimburse Garrett for $410 at closing for the 82 days the buyer will own the property that year. The $410 will show as a debit to the buyer and a credit to Garrett.

Which of the following options describes a loan's beginning balance? 1 Amount of payment that will be applied to the interest 2 Amount of payment that will be applied to the loan balance 3 Amount to be sent as payment each month 4 Loan balance before the monthly payment is applied

4 Loan balance before the monthly payment is applied The beginning balance is the loan balance before the monthly payment is applied

A house sells for $135,000 and the seller pays Entity Brokerage $8,000 in commission. What is the commission rate? 3.9% 4.9% 5.9% 6.9%

5.9% Commission rate = commission ÷ sales price, or, in this case, $8,000 ÷ $135,000 = 0.0592 = 5.9%

Your client Ellis is purchasing a property for $520,000. He made a down payment of $200,000 and plans to finance $320,000. What is the LTV ratio as rounded to the nearest percentage? 50% 55% 62% 65%

62% The LTV ratio is 62%. We get this by dividing $320,000 by $520,000 and converting to a percentage.

Jane is purchasing a property for $310,000 and plans to finance $250,000. What is the loan-to-value ratio? (Round to the nearest percentage.) 79% 81% 83% 85%

81% To get the answer, divide $250,000 by $310,000. Multiply the result (0.81) by 100 and add a % sign.

Ingrid has listed her home at $439,900. She receives several offers close to her list price, and decides to accept the one that comes with the highest earnest money deposit, figuring that buyer is the most willing and able. Which of these offers should she accept? 95% offer, 3% earnest money 96% offer, 5% earnest money 97% offer, $10,000 earnest money 98% offer, 1% earnest money

96% offer, 5% earnest money Ingrid wants the highest earnest money deposit from the offers she receives. The option that gives her the highest earnest money deposit by far: $439,900 x .96 = $422,304, making the EMD $422,304 x .05 = $21,115.20.

At closing, ______ is an amount that's divided proportionately between the buyer and the seller. A discount point An origination fee Mortgage interest Proration

Proration Usually, mortgage interest, taxes, insurance, and other similar expenses are prorated based on a 360- day calendar year (30 days × 12 months).