Real Estate Math

A Nebraska property sells for $478,000. The buyer finances 80% and pays 1 point of origination and 0.5 discount points. The total points cost is:

A$7,170
B$5,736✓ Correct
C$9,560
D$6,450

Explanation

Loan = $478,000 × 80% = $382,400. Points = 1.5% of loan = $382,400 × 1.5% = $5,736.5 = 1.5 points. $382,400 × 1.5% = $5,736. Closest: $5,736. Actually $382,400 × 1.5% = $5,736. Best answer: $7,170 requires 1.875% — recalculate: 1.5 points on $382,400: $382,400 × 0.015 = $5,736.

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