Real Estate Math
A Delaware property closes on September 15. Annual property taxes are $4,320. Using a 360-day year, how much does the seller owe in prorated taxes (January 1 to September 15)?
A$2,880
B$2,520
C$3,060✓ Correct
D$2,700
Explanation
Jan 1 to Sep 15 = 8 months + 15 days = 8.5 months.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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.
Math Concepts
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