A buyer can afford a maximum monthly payment of $2,400. If taxes are $200/month and insurance is $125/month, what is the maximum PITI payment, and how much is available for principal and interest (P&I)?
Why $2,075 Is Correct
Answer A: $2,075
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 Arizona Questions
- A buyer's monthly gross income is $7,500. Using a 28% front-end (housing) ratio, what is the maximum PITI payment they can afford?Real Estate Math
- A buyer's loan has a principal balance of $320,000 at 6% annual interest. What is the first month's interest portion of the payment?Real Estate Math
- A 30-year mortgage has monthly payments of $1,610. The loan balance is $280,000. How much is the interest portion of the first payment at a 6% annual interest rate?Real Estate Math
- A buyer wants a 30-year mortgage at 7% interest. Monthly payment factor is $6.653 per $1,000. If their maximum monthly payment is $2,200, what is the maximum loan amount?Real Estate Math
- An Arizona homebuyer obtains a $280,000 mortgage at 7% annual interest. What is the first month's interest payment?Finance
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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.
Study This Topic
Practice More Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →