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OACIQ > Math > Flashcards

Math Flashcards

1
Q

Relationship between selling price and listing price

A

Negotiating Range

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1
Q

Net Amount for Seller

A

Amount left over after deducing Broker fees and GST+QST

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2
Q

Measuring Living Space

A
  • Basement not included unless situated mostly above ground level
  • Includes closets, additional rooms & storage
  • Excludes garages, verandas (unless all-season), cold storage rooms, recreational rooms, crawl spaces
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3
Q

Calculate the sales price based on the desired net amount

A
  1. Calculate rem rate including taxes as a %
  2. Calculate net desired by seller as a %
  3. Calculate sales price in $

Example:
1. Seller wants net $260k:
2. 5% (rem) x 1.14975 = 5.74875%
3. 100% - 5.74875 = 94.25125
4. Rule of 3: 100*260000/94.25125 = $275858.41

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4
Q

I vs i

A

Interest = I = $, Interest rate = i = %

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5
Q

Compound Interest

A

FV = PV (1+i%)^n

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6
Q

Nominal Rate

A
  • Rate advertised by banks
  • Does not take into account capitalization period
  • Standard rate (calculated with c/y = 1)
  • Rate most often used in statements
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7
Q

Effective Rate

A

(real rate / APR)

  • Rate actually paid by the borrower
  • Takes into account capitalization
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8
Q

Periodic Rate

A
  • rate for the capitalization period
  • actual rate that applies to prn due at beginning of each period
  • = nominal rate / capitalization (c/y)
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9
Q

Discounting

A

Determine PV from FV

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10
Q

Calculator Date Program

A
  • 2nd 1(date)
  • 2nd CE/C(clr work)
  • Enter first date (e.g. 09.2500, enter), September 25 2000
  • → input 2nd date, enter
  • → cpt gives you the DBD
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11
Q

Possession day rule

A

Customary to attribute possession day to the buyer, although there is nothing preventing the parties from proceeding otherwise

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12
Q

Calculating adjustments

A
  • First day typically excluded from adjustment calculation
  • Calculate DBD and rule of 3
    • DBD + 1 to attribute possession day to buyer
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13
Q

Interest Adjustment

A
  • Only when buyer assumes loan
  • FV of balance calculated (some amount of days) after last pmt was made
  • Difference between FV & PV gives the adjustment
  • Seller to buyer, so no need to +1 DBD
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14
Q

Statement of disbursements

A
  • Includes all adjustments made between seller and buyer
  • Determine buyer’s final balance
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15
Q

Rules for choosing mortgage loan rate needed for calculation purposes

A
  • Conventional
    • Higher of contractual interest rate + 2%, or 5 yr benchmark rate from Bank of Canada (25-30y amort)
  • Insured
    • 5yr benchmark, 25yr amort
16
Q

Calculation of Amortization Coefficients

A
  • Gross Debt Service Ratio (GDSR)
    • 32% of gross income can go to payment, taxes and heating
  • Total Debt Service Ratio (TDSR)
    • 40% of gross income can go to payment, taxes, heating and other debts
17
Q

Calculate Loan Amount based on income

A
  1. Verify downpayment and make sure client can pay closing costs another way
  2. Calculate the debt ratio (this is when you choose the mortgage loan rate as well
  3. Find maximum monthly pmt using GDS/TDS
  4. Find max loan amount (PV) using TVM solver
  5. Determine max amount client can spend on property
    a. PV at this stage is not the final amount as it includes the amortized insurance premium (if insured) based on LTV
  6. Consult a mortgage lender
18
Q

Open vs Closed Mortgage

A

Open:
- No repayment penalty
- Higher rate
- Shorter term

Closed:
- Repayment penalty
- Lower rate
- Usually 6mo-5yr term
- Most lenders allow additional payments anyway, either in form of double pmt or % of balance owed at a frequency specified in mortgage contract

19
Q

Advance repayment penalty calculation

A

Higher of:

1- 3 months of interest on advance repayment amount at contractual rate

2- Interest differential (difference between loan rate and bank’s rate)
    - Calculate monthly payment
    - Determine balance due at the time of repayment
    - Determine the balance at the stipulated term of the agreement
    - Update the balance at term and the payments remaining in the stipulated term at the current bank rate
    - Subtract balance due at time of advance repayment from PV amount
20
Q

Surface Area Formulas (rectangle+, triangle, trapezoid and circle)

A
  • Square, rectangle or parallelogram
    • base x height
  • Triangle
    • (base x height) /2
  • Trapezoid
    • (B+b) x height /2
  • Circle
    • Pi x r^2
    • Circumference: 2 x pi x r = D x pi
21
Q

Pythagorean Formula

A

c^2 = a^2 + b^2

OACIQ (8 decks)

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