An investor buys a Colorado apartment building for $1,200,000, puts 25% down, and finances the rest. What is the loan amount?
Why $900,000 Is Correct
Answer C: $900,000
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 Colorado Questions
- A property in Colorado sells for $420,000. The buyer makes a 20% down payment and obtains a conventional mortgage. What is the loan amount?Finance
- 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 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
- Which type of mortgage loan allows a Colorado veteran to purchase a home with no down payment and no PMI?Finance
- A Colorado investment property is purchased for $500,000. The investor requires an 8% cash-on-cash return on a $125,000 down payment. What annual cash flow is needed?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 investor purchases a duplex for $450,000. Each unit rents for $1,800/month. Annual operating expenses are $18,000 and vacancy is 5%. What is the cash-on-cash return on a $90,000 down 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
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 Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →