Real Estate Math
A Massachusetts investor purchases a commercial property with a 30% down payment of $240,000. What was the purchase price?
A$800,000✓ Correct
B$720,000
C$336,000
D$960,000
Explanation
If 30% = $240,000, then 100% = $240,000 ÷ 0.30 = $800,000.
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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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