A mortgage of $150,000 at 7% annual interest has a monthly payment of $998. How much of the first payment is principal?
Why $123 Is Correct
Answer A: $123
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
People Also Study
Related Alabama Questions
- A buyer takes out a $240,000 mortgage at 6.5% annual interest. What is the first month's interest payment?Real Estate Math
- A buyer obtains a $180,000 mortgage at 7% for 30 years. The monthly payment factor is $6.65 per $1,000 borrowed. What is the monthly principal and interest payment?Real Estate Math
- A borrower takes out a $200,000 mortgage at 6% annual interest. What is the monthly interest payment in the first month?Finance
- A $250,000 loan at 5% annual interest has a monthly payment of $1,342. How much of the first payment goes to interest?Real Estate Math
- A $220,000 loan has a monthly payment of $1,319. After the first payment, the remaining balance is $219,731. How much principal was paid in the first month?Real Estate Math
- An Alabama buyer qualifies for a $250,000 loan with a monthly payment of $1,500. What is the annual debt service?Finance
- A buyer obtains a $250,000 mortgage at 6% annual interest. What is the first month's interest charge?Finance
- Private mortgage insurance (PMI) is typically required in Alabama when the borrower's down payment is less than:Finance
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →