Real Estate Math

A West Virginia buyer qualifies for a maximum monthly mortgage payment of $1,200. At an interest rate of 6% for 30 years, the payment factor is $5.99 per $1,000 of loan. What is the maximum loan amount the buyer can qualify for?

A$185,000
B$200,334✓ Correct
C$195,000
D$190,000

Explanation

Maximum loan = ($1,200 / $5.99) x $1,000 = 200.33 x $1,000 = $200,334. To solve this, multiply the relevant values: $1,200 and $5.99 at 6%.. The correct answer is $200,334.. This is a common calculation on the West Virginia real estate exam.

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