chapter 17 quiz Flashcards
at a closing to take place on June 16th, the purchaser’s charge for prepaid interest om a new loan will be for:
fifteen days
Since the closing took place on June 16 and there are 30 days in June you count starting the day of closing.
Also chap 17 -3
B: Calculating the interest adjustment (Pre Paid Interest)
The purpose of the interest adjustment is to allow the buyer’s monthly payment to come due on the 1st of the month. Interest is paid in arrears. In other words, the loan payment made on the 1st of July covers the interest that was due for June. Therefore when the closing occurs on June 16th, for example, the first payment on the buyer’s load will not be due until August 1st and this will cover the interest for July. We still have to provide for the payment of interest in June starting on the 16th.
in estimating prepaid taxes for a purchaser with a new loan who has signed a contract, it is safe to assume an amount equal to:
an amount based on estimated date of first monthly payment.
Chap 17 -6
1. Property Tax
The annual tax bill is divided by 12 to get a monthly figure; this in a turn is multiplied by the number of months worth of tax payments the lender can collect. It cannot exceed the number of monthly increments necessary to pay the next tax bill when it comes due plus two extra months
a buyer purchased a property for $324,500 and the loan amount was $292,050. what was the loan to value ratio?
90% loan
chap 17 -3
C. Calculating the cost of mortgage insurance
Loan amount above 80% up to and including 90% loan to value.
In this question the loan amount =price-down payment
324,500 ÷ 292,050= .9 or 90%
at a closing, the purchaser’s cost for hazard insurance would include:
1 year policy plus at least 2 months in escrow
all of the following costs will usually be included in a buyer’s monthly loan payment EXCEPT:
–Bills for water and sewer services–
- principal and interest on the loan balance
- a monthly payment for property taxes
- a monthly payment towards hazard insurance
chap 17-5
D Calculating Escrow Items
If the loan a buyer is arranging is a budget mortgage then the escrow account for that purpose must be set up at closing. In a budget mortgage the lender will collect as a monthly payment not only principal and interest but also increments toward the payment of property taxes, hazard insurance, and mortgage insurance, if needed, so that the lender can pay these costs when due.
if it costs $9.52 per $1,000 to borrow for 30 years at an amortized rate of 11%, what would the monthly payment to principal and interest be on a $96k loan?
$913.92
Step 1
factor is $9.52 per $1000 so we have to figure how many increments per 1000.
divide the loan amount by 1000
$96000/1000=96X9.52=913.92
the intangible tax is calculated:
on the new loan amount
if a loan is in the amount of $87k and the interest rate is 9.5%, using a 360 day financial calendar year, the daily rate for computing interest proration is:
$22.96
$87,000.00x9.5%=$8265
$82.65/360=$22.96
the intangibles tax is paid at the rate of:
$1.50 per $500
Calculating Intangibles Tax
Loan amount ÷ 500 (round up to the whole number)= taxable amount
taxable amount x $1.50
the earnest money deposited with the contract will appear on the estimated purchaser cost sheet as:
a credit to the buyer
in a contract providing for a conventional loan, the loan discount fee will be:
paid according to the provisions in the contract
if a purchaser is buying a home for cash, which of the following closing costs would not be reduced?
the transfer tax
the Estimated Purchaser Cost form is designed to show the buyer both how much cash will be required and……..
the monthly payment
is it a good idea for a buyer’s agent to prepare a Cost to Buyer estimate for first-time home buyers, even before they begin to look at property?
yes, knowing how much cash they should have for closing will help in finding an affordable price.
A purchaser who closes her new loan on May 1 will have her first payment due on……?
June 1
