A Colorado home has a $280,000 loan at 5% annual interest. The first monthly payment is entirely interest only. What is the first month's interest payment?
Why $1,167 Is Correct
Answer B: $1,167
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 Colorado Questions
- A Colorado borrower obtains a $300,000 loan at 6% annual interest, interest only. What is the monthly interest payment?Finance
- A Colorado home sold for $475,000. The buyer financed 80% with a conventional loan at 6.5% annual interest. What is the annual interest on the loan in the first year (simple interest calculation)?Real Estate Math
- A Colorado buyer's loan of $360,000 at 6.5% interest for 30 years has monthly P&I payments of approximately $2,275. How much interest is paid in the first month?Real Estate Math
- A Colorado buyer purchases a home for $325,000 with a 10% down payment and a 30-year loan at 7.25%. The monthly P&I payment is $1,995. Approximately how much principal is repaid in Year 1?Real Estate Math
- A Colorado buyer makes a 5% down payment on a $380,000 home. If PMI costs 0.8% annually on the loan amount, what is the monthly PMI payment?Real Estate Math
- A Colorado buyer is financing a home with an 80% first mortgage, 10% second mortgage, and 10% down payment (piggyback). One advantage of this structure over a single 90% LTV loan is:Finance
- A Colorado buyer obtains a $280,000 loan at 7% annual interest. What is the monthly interest for the first month (interest-only)?Finance
- A Colorado buyer obtains an FHA loan to purchase a $350,000 home. The FHA minimum down payment is 3.5%. What is the minimum down payment required?Finance
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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 Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →