Real Estate Math
A Kansas 30-year fully amortized $150,000 mortgage at 8% has an approximate monthly payment factor of $7.34 per $1,000. What is the monthly payment?
A$1,001
B$1,050
C$1,101✓ Correct
D$1,200
Explanation
$150,000 ÷ $1,000 × $7.34 = 150 × $7.
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Key Terms to Know
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.
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.
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