Real Estate Math
A Pennsylvania property was purchased for $180,000 and the buyer paid 4 points. What were the total points cost on an 80% LTV loan?
A$5,760✓ Correct
B$7,200
C$6,480
D$4,320
Explanation
Loan amount = $180,000 × 80% = $144,000. Points cost = 4% × $144,000 = $5,760. Points are calculated as a percentage of the loan amount, not the purchase price. 4 points on a $144,000 loan = $5,760 paid at closing.
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