Real Estate Math
A loan amortizes over 30 years. The monthly payment factor is $5.99 per $1,000 borrowed. The loan amount is $280,000. What is the monthly payment?
A$1,597.60
B$1,677.20✓ Correct
C$5,990.00
D$2,095.00
Explanation
Monthly payment = ($280,000 / $1,000) × $5.99 = 280 × $5.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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