Real Estate Math

A property in Colorado sold for $390,000. The buyer paid 5% down. The lender charges 1.5% origination fee on the loan amount. What is the origination fee?

AA. $5,557.50✓ Correct
BB. $5,850
CC. $5,557
DD. $5,542.50

Explanation

Loan Amount = $390,000 × (1 - 0.05) = $390,000 × 0.95 = $370,500. Origination Fee = $370,500 × 1.5% = $5,557.50.

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