Real Estate Math
A Kansas first-time homebuyer receives a $7,500 KHRC down payment assistance grant. The total purchase is $185,000. What percentage of the purchase price is the grant?
A3.5%
B4.05%✓ Correct
C4.35%
D5%
Explanation
$7,500 ÷ $185,000 = 0.04054 ≈ 4.
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Key Terms to Know
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.
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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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