RE Math Calculation Review

The Smith home has an assessed value of $64,120, and their tax rate is 3.2%. What is their annual tax bill?

$2,051.84

The Slathertons are looking at buying a $300,000 property with a 20-year loan at a 6% interest rate. How much would their monthly principal and interest amount be? Plug in the numbers using the amortization chart in your resources to see what the payment per month would be. (Use the amortization chart your lesson instructed you to print out.)

$2,149.30 The estimated payment is $2,149.30. Remember to divide $300,000 by 1,000, then multiply the factor (7.16431) by 300.

A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month's mortgage payment is interest?

$2,333.33 $400,000 x 0.07 = $28,000; then $28,000 ÷ 12 = $2,333.33

A buyer with a $242,000 loan has a monthly principal and interest payment of $1,317.66. If $1,033.54 is interest, what's the new principal balance after the first payment is applied?

$241,715.88

Your clients sold their property for $500,000. Your commission rate is 5%. What's your commission (before splits or sharing with the cooperating agent)?

$25,000

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?

$265,000 Subtract closing costs from cashier's check amount to find down payment balance ($34,450 - $7,950 = $26,500), which equals the earnest money (total down payment is 20%). Divide earnest money by 10% to find purchase price ($26,500 ÷ .1 = $265,000).

A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?

$315,789 In order to calculate this, start with 100% minus a 5% commission, which is 95% or .95. Take $300,000 and divide this amount by .95.

Almanzo is buying a horse farm for $695,000 and put down 15% in earnest money. His closing costs and down payment total $139,000. How much will he need to bring to closing?

$34,750

A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what's the new principal balance after the first payment is applied?

$349,698.87

A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what's the new principal balance after the first payment is applied?

$349,698.87 If $1,801.23 of the $2,102.36 is interest, that leaves $301.13 for principal. Subtract $301.13 from $350,000 for a new principal balance of $349,698.87.

Ezra's listing sold for $100,000. His commission rate was 4%, and the property appraised at $95,000. What's Ezra's commission before splits or sharing with the cooperating agent?

$4,000 (Commissions are based on sales price, not appraised value or list price. Four percent of $100,000 is $4,000.)

Your client Frank is interested in selling a 54,450-square-foot lot. A comparable property in the vicinity sold for $3,500 per acre. What would be reasonable list price for Frank's property?

$4,375

A buyer is purchasing a property for $500,000. His lender's loan-to-value ratio is 90%. How much is the buyer financing?

$450,000

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

Esme buys Steve's beach townhouse for $475,000. The transfer tax in the area is $2.00 for the first $1,000 and $0.10 for each additional $100. Calculate what Steve will pay for the transfer tax at closing.

$476

An owner purchased a rental property for $750,000. What annual cash flow would result in a return on investment (ROI) of 7%?

$52,500

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?

$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).

The purchase price of the home Leroy is buying is $300,000. He's putting $100,000 down and is paying three discount points. How much will this cost?

$6,000

Roland's farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan's monthly taxes?

$667.00 Assessed value + improvements = total value of $2,000,000. Multiply 2 million by 4 (mills/millage rate) then divide by 1000 = $8,000 in annual taxes . Divide $8,000 by 12 to give you the monthly tax amount ($8,000 ÷ 12 = $667.00).

You're working with a buyer who's purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be?

$720

Yasmin listed a house at a 6% commission rate, and it just sold for $463,500. Her brokerage and the buyer's agent's brokerage split the commission equally between them. Then Yasmin, who has a 60/40 commission split with her broker (Yasmin gets the higher split), took her check to the bank. How much did Yasmin earn from this transaction?

$8,343

Gary has an 80% LTVR on his new $318,000 townhome with an annual interest rate of 4.125%. What's his interest payment the first month?

$874.50 The loan amount is $254,400 ($318,000 x .8). The first month's interest is $874.50 ([$254,400 x .04125] ÷ 12).

You're working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?

$875

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?

156000-80000 = 76000

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?

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.

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.)

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

Each point is worth

one quarter of 1% or .025%

The Goldmans are buying the Kraskis' house for $415,000, and closing is set for March 15. The Kraskis have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Goldmans will owe the Kraskis at closing. Assume February has 28 days this year. The sellers own the day of closing.

Calculate daily rates for taxes to be prorated: $2,506 ÷ 365 = $6.87. The Kraskis pay the first 74 days (January 1 through March 15): 74 x $6.87 = $508.38. $2,506 - $508.38 = $1,997.62 owed by the Goldmans. Remember that regarding insurance, if a prorated amount is paid back the sellers, it would be paid by the insurance company rather than the buyers.

Joyce just closed on a condo for $366,900 and put down 20% to obtain an 80% loan and avoid having to pay for private mortgage insurance. How much equity does she have in her condo?

Joyce's equity is $73,380. The value of her condo is $366,900. She put $73,380 down ($366,900 x .20). Because she just closed, her equity is exactly the same as her down payment.

Julio's lender presents him with a loan for $275,000 for 30 years at a 4.75% interest rate. How many discount points does Julio need to pay upfront to lower the interest rate to 4%?

Lowering the interest three quarters of 1% requires three points, since each point is worth one quarter of 1%.

The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. What is the monthly tax amount your clients owe?

Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes. ($209,000 x .52%) = $1,086.80 ÷ 12 = $90.57

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?

Roberto's closing costs will be $7,050 ($235,000 x 0.03) and commission will be $14,100 ($235,000 x 0.06). Subtract those two amounts, the furnace cost ($800), and the mortgage loan payoff ($48,750) from $235,000 to get $164,300.

Which of the following statements is the best definition of "yield" in the mortgage industry?

The amount of money a loan makes over time

Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan?

$1,042.29 In the first month, Juan pays $1,044.79 in interest ([$295,000 x .0425] ÷ 12) and paid the principal down $705.21 ($295,000 - [$1,750 - $1,044.79]). The next month, he pays $1,042.29 in interest ([$294,294.79 x .0425] ÷ 12). second month interest = second month payback - second month principle. second month pricile = first month priciple = first month payback -first month interes

Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?

$285,000

On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month.

$288 Seller credit for property taxes: = Total tax × (Number of days/360) = $1,140 × (91/360) = $288 Hence, Credit is $288 You HAVE to add one more day the buyer pays and the seller gets a credit for it when it states Buyer's liability ( April 1 - December 31 ) = 1140 - 288 = $ 852

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.

$298

A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?

$3,593.75

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?

$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.

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?

$4025

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?

$5,430

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?

$6,750 The buyer is financing $450,000. Multiply this amount by 1.5% (or 0.015) to get $6,750.

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?

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 in points by the loan amount to get the number of points they paid: ($6,150 ÷ 360,000 = 0.0170833, or 1.71).

The Gatlins' lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?

6.29% Annual payment ÷ loan balance = interest rate. $1,830 x 12 to get the annual payment of $21,960. Then divide the annual payment by the loan amount: $21, 960 ÷ $349,000 = .0629, or 6.29%.

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?

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).

Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she's current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue's closing statement?

Credit of $721.50 Tax daily rate: ($1,350 ÷ 365 = $3.70) 195 days (days from closing until year end) = a $721.50 seller credit. Any prepaid seller's homeowners insurance will be refunded to the seller outside closing, so this doesn't appear on the closing statements.

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement.

Credited $1,207 The seller is required to pay the for January 1 through May 19. The seller will be credited $1,207, because $1,949 ÷ 365 = $5.34, and $5.34 × 226 days (the number of days the buyer is required to pay) = $1,206.84. That's $1,207 if rounded to the nearest whole dollar.

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?

First, multiply the monthly payment ($2,042.71) by the total number of payments (180 = 12 payments/year for 15 years). The total paid back is $367,687.80. Then subtract the original loan value: $367,687.80 ‒ $250,000 = $117,687.80.

Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller. She's financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing?

Helen must bring $2,300 to closing to pay the total amount due. She owed a total of $4,800 minus the earnest money she provided when the contract was signed, $2,500, which left the amount still owed of $2,300.

Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin's equity?

Subtract the loan balance from the market value of the home to find the equity $254,200

The Gomez family just moved into their dream home. They purchased the home for $264,985, and it appraised at $272,402. The assessment ratio for their area is 25%, and the tax rate for their area is 2.8%. What is their annual tax bill?

The Gomez family will pay $1,907 in annual taxes ($272,402 × .25 = $68,100 × .028 = $1,907).