A buyer puts 20% down on a $525,000 home. What is the loan amount?
Why $420,000 Is Correct
Answer B: $420,000
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 California Questions
- A buyer puts 20% down on a $500,000 home. What is the loan amount?Real Estate Math
- A buyer purchases a home for $485,000 and makes a 20% down payment. What is the loan amount?Real Estate Math
- A buyer purchases a home for $750,000 and makes a 20% down payment. What is the loan amount?Real Estate Math
- A home is purchased for $480,000 with a 20% down payment. The buyer pays 1% of the loan amount as an origination fee. How much is the origination fee?Real Estate Math
- Which loan program is specifically designed for veterans and active-duty military and requires no down payment?Finance
- Which loan program is specifically designed to help veterans purchase homes with no down payment requirement?Finance
- What is the loan-to-value (LTV) ratio if a buyer purchases a $400,000 home with a $60,000 down payment?Finance
Key Terms to Know
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →