Real Estate Math
A 15-year fixed-rate mortgage on a Florida property for $200,000 at 4% has a monthly payment factor of $7.40 per $1,000. What is the monthly payment?
A$1,400
B$1,480✓ Correct
C$1,520
D$1,650
Explanation
Monthly payment = ($200,000 ÷ $1,000) × $7.40 = 200 × $7.
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Key Terms to Know
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.
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.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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