RE Math Flashcards by Elizabeth Beard

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?

$4,025

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Using the capitalization formula, what is the value if the net operating income is $20,000 and the rate of capitalization is 10%?

$200,000

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Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?

$105,263.16

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Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter?

Add two times the length to two times the width.

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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.

$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).)

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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

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Your clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?

$2,400

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Your client, a builder, is considering buying three adjacent lots. They each have the same depth, 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have?

446 feet

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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?

$254,200

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Stu’s seller client, Gabi, wants to figure out how much equity she has in the home she’s selling. Gabi paid $200,000 eight years ago and made several great renovations over the years. She still owes $125,000. Stu calculates that comparable home values in her area have risen about 15% since Gabi bought. Assuming Stu pulled appropriate comps, about how much equity does she have?

$105,000

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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?

$276,596

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Giant Industries has a $674,232 gross operating income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income?

$345,103

(The formula for finding net operating income is: gross income – operating expenses = net operating income. So, $674,232 – $329,129 = $345,103. Other expenses like loan interest and debt repayment aren’t included in this calculation.)

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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

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How would you calculate the transfer tax if it’s $.35 per $1,000 of the sales price ($400,000)?

(400,000 ÷ 1,000) x .35

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Edric owes $115,000 on his lakefront home, which he’s selling for $350,000. He’s spent $73,000 in major renovations, and he wants to take that expense into consideration when he calculates how much he’ll actually pocket at closing. What number does he come up with?

$162,000
(Once Edric’s loan is paid off, he’ll be left with $235,000 ($350,000 – $115,000). When he subtracts the cost of the renovations, he’s left with $162,000 ($235,000 - $73,000).)

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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?

$117,687.80

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A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal each month?

$1,110.64

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How many acres are in a parcel described as, “The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM”?

20
(This legal description defines half of a quarter-quarter section. A quarter-quarter section is 40 acres; half of a quarter-quarter section is 20 acres. Alternatively, multiply the three fractions’ denominators (2 × 4 × 4) and divide into 640 (640 ÷ 32 = 20).)

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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

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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.)

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What’s the rate of capitalization of a property generating net property income of $25,000 per year that’s valued at $312,500?

8%
(The capitalization formula is value = income ÷ rate of capitalization. To determine rate of capitalization, divide Income by value ($25,000 ÷ $312,500 = 8%).)

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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

(One acre = 43,560 square feet. Figure his lot acreage first (54,450 ÷ 43,560 = 1.25 acres). Since the two lots are comparable, calculate the price of the comp ($3,500 x 1.25 = $4,375), which is a good list price for Frank’s lot.)

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Gunther’s gross monthly income is $3,800, and he has no monthly debt payments. The lender’s qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What’s the maximum housing payment Gunther can afford?

$1,064
(Calculate the debt and housing ratios that buyers need to meet both lending ratios. While Gunther qualifies for a payment of $1,368 under the total DTI, he only qualifies for $1,064 under the housing ratio ($3,800 x 28%).)

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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?

$293.70

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

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Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?

$4,000

Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax?

$255,000 | Transfer tax is calculated based on the purchase/sales price ($255,000).

A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what's the housing ratio?

23% | The housing ratio is 23%: ($1,000 + $150) / $5,000 = .23 x 100 = 23%.

A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what’s the list price for this parcel?

$763,560

Your clients are looking at buying a $200,000 property with a 30-year loan at a 5% interest rate. How much would their principal and interest payment be per month? Plug in the numbers using the amortization chart in your resources see what the payment per month would be. Remember: The monthly payment multiplier is per $1,000 of the mortgage.

$1,073.64 | The estimated payment is $1,073.64. Remember to divide $200,000 by 1,000, then multiply the factor (5.36822) by 200.

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

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?

$73,380

A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?

$3,200

If an apartment building is valued at $970,000 and has a capitalization rate of 9%, what is the net operating income?

$87,300 (The formula to determine net operating income when you know capitalization rate and value is: rate × value = income (R × V = I). Remember to convert the 9% into a decimal by shifting the decimal point two places to the left: .09 × $970,000 = $87,300.)

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 see what the payment per month would be. (Use the amortization chart your lesson instructed you to print out.)

$2,149.30

How many acres are in a parcel described as, "The NE 1/4 SW 1/4 Section 3, Township 4S, Range 2W of the 6th PM"?

40 (This legal description defines a quarter-quarter section, which is 40 acres. Alternatively, multiply the two fractions’ denominators (4 × 4) and divide into 640 (640 ÷ 16 = 40).)

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?

$387,000

Shelly’s listing sold for $650,000. The total commission generated from the sale is 5%, of which Shelly’s brokerage keeps half. Shelly has an agreement with her broker that she earns 90% of commission generated. How much will she be paid for this sale?

$14,625

Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing?

$106,250

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

Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?

Her down payment of $50,000 isn't at least 20% of the purchase price.

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. If $1,145.83 is interest, how much is applied to principal?

$896.88

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?

$76,000

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.)

81%

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400’ deep. What was the price per front foot of the property?

$1,335.67 (First, find the square footage (5.5 x 43,560’ = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400’ = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95’ = $1,335.67 per front foot.)

Charlie and Wendy’s monthly expenses look like this: $400 credit card payment (it was a beautiful wedding and honeymoon!) and a $150 payment for a student loan that will be paid off in six months. They’re anticipating a house payment close to $1,500. The couple’s gross monthly income is $6,500. When calculating ratios, the lender doesn’t consider any payments with 10 or fewer payments remaining. What is their current housing ratio?

23.1% Remember, the housing ratio only looks at payments related to housing, not all expenses. To find this number, divide $1,500 by $6,500. Then multiply by 100 to turn this number into a percentage. We get a hair over 23%.

Now let’s calculate Charlie and Wendy’s total debt ratio using the same information. They have a $400 credit card payment and a $150 payment for a student loan that will be paid off in six months. They’re anticipating a house payment close to $1,500. The couple’s gross monthly income is $6,500. When calculating ratios, the lender doesn’t consider any payments with 10 or fewer payments remaining. What is their total debt ratio?

29.2% In Charlie and Wendy’s situation, the $150 student loan payment is the only expense not considered as part of this calculation because there are fewer than 10 payments remaining. The sum of the remaining expenses is $1,900. Divide this by $6,500. Then multiply by 100 to get a percentage. Their total debt ratio is 29.2%.

John uses the VA home loan to purchase property. His mortgage is $200,000. Then, two years later, John defaults on his loan. How much will the VA reimburse the lender?

$50,000 The VA guarantees one quarter of the loan amount, so the lender in this case will be reimbursed up to $50,000.

Millie and Jerry are purchasing a home using their VA loan benefit. The sales price is $320,000, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?

$80,000 The VA guarantees up to a quarter of the total loan amount, up to $104,250, so Millie and Jerry’s loan is guaranteed for one-fourth of $320,000, which is $80,000.

A local buyer is purchasing a property for $120,000. What will the seller pay in transfer tax if the rate is $.37 per $100?

$444 In this situation, the transfer tax rate is $0.37 per $100. This is the same thing as .0037, which makes it easy to multiply. Multiply the transfer tax (.0037) by the value of the property ($120,000).

John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property?

Multiply 185 by .5; multiply your answer by 225. You can calculate the area of a triangle in several ways. One way is to multiply the triangle's base measurement by .5, then multiply that answer by the triangle's height [(185 × .5) x 225].

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 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

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 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.

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 The formula is loan balance × interest rate ÷ months per year. Loan balance is: $200,000 × .0525 = $10,500; $10,500 ÷ 12 = $875

If an appraiser has found the value of a property to be $250,000 using a cap rate of 10%, what was the property’s net operating income?

$25,000

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 4-bedroom, 4-bath 4,875 square feet house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?

$86.72

A lot measuring three-fourths of an acre is for sale. How many square feet is this?

32,670

Dale is purchasing a property that has an assessed value of $35,190. If the tax rate is 5%, what will he likely pay annually in property taxes?

$1,759.50

A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a 1% loan origination fee. How much is the loan origination fee?

$3,200

Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18’ x 6’. The kitchen is 20’ x 30’. The living room is 25’ x 45’. Two bedrooms are 12’ x 16’, and the master bedroom is 14’ x 20’. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?

$17,404.09 First, find the area of each room and add them together to get the total square footage. 108 + 600 + 1125 + 192 + 192 + 280 = 2,497 square feet. The total cost of the flooring per sq. ft. is $5.48 + $1.49 = $6.97. 2,497 x $6.97 = $17, 404.09.

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?

$1,907

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

How many feet are in a mile?

5,280 A mile is 5,280 feet. When the British started using it as a length unit, it was necessary to relate it to furlong, a common length unit used in agriculture. One furlong is 660 feet. It was decided that one mile would be eight furlongs (8 x 660=5,280).

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's the total amount the borrower will pay back over the life of the loan?

$367,687.80

Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.

$100,000

Your buyer client, Max, just signed a purchase agreement for a $520,000 home. He has a 60% LTV ratio, and his lender’s charging a 1.5% loan origination fee. What loan origination fee can Max expect to pay at closing?

$4,680

A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied?

$249,103.12

If you have an 800-square-foot rectangular building and it sells for $75,000, that equates to ______ per square foot.

$93.75

The gross income multiplier for an area is 12x. If the estimated annual rent is $10,000, what's the property's estimated value?

$120,000

If the monthly property tax rate is $74.15 and the closing is on April 30, what will the seller owe at closing? Assume a statutory calendar and that the seller hasn’t made any payments. Round to the nearest cent.

$296.60

What’s the assessed value of a residential property in Tennessee that has an appraised value of $249,500?

$62,375

Benji is a buyer’s agent, and he'll receive a split of the commission paid from the sale of Harriet’s listing. The property sold for $425,000. The total commission paid from the sale is 6%, split evenly between the buyer and seller brokerages. Benji has an agreement with his broker that he earns 80% of the commission received. How much will Benji be paid from this sale?

$10,200

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400’ deep. What was the price per front foot of the property?

$1,335.67 First, find the square footage (5.5 x 43,560’ = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400’ = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95’ = $1,335.67 per front foot.

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 (round to the nearest dollar).

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.

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).

Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $201,500. Their tax rate is 0.63%. How much will their monthly taxes be?

$105.79 Monthly taxes are calculated by multiplying the assessed value by the tax rate and dividing by 12: $201,500 × .63% = $1,269.45 ÷ 12 = $105.79.