RE Math Flashcards
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
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
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
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.
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).)
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
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
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
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
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
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
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.)
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
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
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).)
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
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
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).)
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
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.)
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%).)
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.)
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%).)
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).
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
