Real Estate Math
A Florida buyer finances $280,000 at 4.5% for 30 years. Monthly payment factor is $5.07 per $1,000. What is the monthly P&I payment?
A$1,419.60✓ Correct
B$1,540.00
C$1,320.00
D$1,450.00
Explanation
Monthly payment = ($280,000 ÷ $1,000) × $5.07 = 280 × $5.
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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.
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