Real Estate MathIntermediateNorth Carolina Exam

A buyer in NC makes a 20% down payment on a $510,000 home. They finance the balance at 6.5% annually. The first month's interest payment is:

Q: A buyer in NC makes a 20% down payment on a $510,000 home. They finance the balance at 6.5% annually. The first month's interest payment is:

Loan = $510,000 x 0.80 = $408,000. Monthly interest = $408,000 x (0.065/12) = $408,000 x 0.005417 = $2,210 (approximately).

A$2,210Correct

B$2,380 (computed using the wrong base value for the loan calculation)

C$2,754

D$2,142

Why $2,210 Is Correct

Answer A: $2,210

Loan = $510,000 x 0.80 = $408,000.

Exam Tip: Real Estate Math

Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.

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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.

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.

Discount Points

Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.

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.

Math Concepts

Down Payment

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