LTP Math Exam Questions with Correct Answers

LTP Math Exam Questions with Correct Answers A provisional broker is contacted to list a property where the seller desires to net $100,000 from the sale of the property. The current mortgage balance is $175,000, commission of 6%, deed prep of $125 and other seller closing costs of $1,000. The closing attorney fee was $800. What must the property sell for in order for the seller to cover all expenses and net the desired amount, rounded to the nearest dollar? - Answer-Add seller's known expenses, mortgage balance, and desired net. Seller pays commission $100,000 + $175,000 + $125 + $1,000 = $276,125 Do not know sale price Sale price (100%) - commission rate (6%) = 94%. $276,125 / 94% = $293,750 A property measures 400 x 300 and sells for $200,000. Which of the following is TRUE? - Answer-Property sold for $500 per front foot 400 x 300 / 43,560 = 2.7548 price per acre $200,000 / 2.7548 = $72,600 price per sq ft 400 x 300 = 120,000 $200,000 / 120,000 = $1.67 An investor purchased a building for rental income. Two units rent for $750 per month and remaining 4 rent for $925 per month. Vacancy rates are 3%. A property manager was hired at a 10% management fee and this person created an operating budget factoring in property taxes of $3,211, operating expenses of $5,000, debt service of $3,000 per month, and reserves of $8,000. What estimated NOI according to the operating budget? - Answer-$38,264.20 Gross Income - Vacancy & collection = effective gross income / total anticipate revenue - operating expenses = NOI $62,400 = (2 units x $750 + 4 units x $925) x 12 - vacancy and losses - $1,872 = EGI $60,528 - operating expenses - $22,263.8 = NOI $38,264.20 A commercial property sold for $6.5 million. The seller agreed to pay 7% commission of the first 2 million of sales price, 6% on the next 2 million of sales price and 4% of the remainder. How much commission does the seller owe? - Answer-$2,000,000 x 7% = $140,000 $2,000,000 x 6% = $120,000 $2,500,000 x 4% = $100,000 Total comp = $360,000 A buyer purchases a property for $220,000, closing on November 13, and receives a loan at 80% LTV. The lender charges 1% for discount points and $875 in loan origination fee for the borrower's 4% mortgage loan. At closing, the attorney charges a $950 fee for closing, a $35 recording fee, and $250 for deed prep. The taxes on the property are $1,200 for the year and have been paid. Insurance of $600 will be paid for the first year and collected at the closing. The attorney will collect interim interest, a 6% commission, 2 months of taxes and insurance for the escrow account, and excise tax. The buyer has paid $2,000 as earnest money. How much should the buyer's agent prepare the buyer to bring to closing? - Answer-$47,029 SP $220,000 - Loan $176,000 + Discount Point $1,760 + Origination $875 + Attorney Fee $950 + Recording Fee $35 + Tax $156.67 + Insurance $600 + Interim Interest $352 + Escrow Insurance $100 + Escrow Tax $200 - Earnest Money $2,000 = $47,028.67 Loan: $220,000 x 80% = $176,000 Discount Points: $176,000 x 1% = $1,760 Prop Tax Proration: $1200 / 360 x 47 days = $156.67 debit buyer / credit seller Prop Tax Days - Buyer: N(17) + D(30) = 47 days Interim Interest Proration: $176,000 x 4% / 360 x 18 days = $352 Intermin Interest Days: 30 - 13 + 1 = 18 days Sophie is trying to calculate the amount she would save in monthly payment by choosing a 30-year loan versus a 15-year loan. The purchase price is $380,000 with 90% LTV conventional loan. The 15-year loan is at a rate of 5.5% and the 30-year loan is at a rate of 6%. Using the amortization chart below, what is the difference in monthly payment? AMORTIZATION CHART: Loan Term 15-years 20-Years 30-Years Interest Rate: 5 7.91 6.60 5.37 5 1/4 8.04 6.74 5.53 5 1/2 8.18 6.88 5.68 5 3/4 8.31 7.03 5.84 6 8.44 7.16 6.00 - Answer-Loan Amount: $380,000 x 90% = $342,000 15-year mortgage at 5.5% amortizes at 8.18 and a 30-year mortgage at 6% amortized at 6.00. Mortgage Payment: Loan / 1,000 x Factor 15-Year Payment: $342,000 / 1,000 x 8.18 = $2,797.56 30-Year Payment: $342,000 / 1,000 x 6.00 = $2,052 Payment Diff: $2,797.56 - $2,052 = $745.56