Pre license math review

Pre-License Math Review10 Questions on state test

Calculating physical dimensions of Lot & Structure Lot size 450 X 484 = 217,800 sq. ft. Structure size 60 feet X 40 feet = 2,400 square feet Lot 1 , Block 1, Brown Acres 484 feet Spot’s House 40 feet 60 feet 450 feet – Front Foot Easy street

What is property value? Calculating size Lot is 450’ x 484’ = 217,800 square feet First # is front foot (street) Land in this area sells for about $30,000 per acre What is the market value of this lot? 217,800 / 43,560 = 5 acres x $30,000 = $150,000

What is value of house? Spot’s house is 60’ x 40’ = 2400 square feet Only heated and cooled area above ground is included in living area Comparable homes sell for about $120 per square foot plus land cost 2400 square feet X $120 per sq. ft. = $288,000

Land and House What is the market value for this house and land? 2400 x $120 = $288,000 + $150,000 land = $438,000 Market Value, Price, and Cost are not necessarily related Except in new construction

$438,000 Market Value How much is a 10% commission? How much is a 5% commission? Divide the 10% fee in half to $21,900 Listing broker splits 50/50 with selling broker Listing agent gets 60/40 split with company How much was check to agent?

438,000 X .05 = $21,900 total commission 50% to selling broker = $10,950 Listing broker then splits 60% to listing agent = $6,570 40% to listing brokerage = $4,380

LTV = Loan to Value New buyer got an 80% LTV mortgage How much was loan? VA 100% Rural 100% FHA 96.5% Conventional 80%

$438,000 X .8 = $350,400 conventional loan Buyer paid origination fee of 1 point A point is 1 % of loan, not purchase price How much for fee? $3,504 Buyer paid 3 discount points Increases lender’s yield by 3/8 % How much for points? $10,512 Loan points are based on loan amount May be added into loan

Interest rate is 6% on $350,400 How much is payment (amortized loan) of 30 years Rate chart 30 years @ 6% = Factor of 6 350.4 X 6 = $2,102 payment of Principle & Interest Taxes and Insurance will be on top of P&I It’s a PITI the payment is so much

$2,102 monthly payment $350,400 loan X 6% (.06) / 12 = interest first month $21,040 annual interest / 12 months = $1,752 first month interest $2,102 payment - $1,752 interest = $350 principle Entire first year’s principle will only be about $4,200 First year’s interest will be about $21,000 Second month loan balance $350,400 - $350 = $350,050 Second month interest $350,050 X .06 = 21,003 / 12 = $1,750

Proration Closing on 21th of month Use banker’s year of 360 days, 12 months, 30 day month Unless told to use calendar year Prepay interest for 10 days, includes day of closing $350,400 X .06 = $21,024 / 360 = $58.40 per day X 10 days = $584.00 Pays interest for balance of month of closing First payment will be due the 1st of second month Will include interest for first month after closing

Decimal to percentage 0.25 = 25% 0.9 = 90% Percentage to decimal 33% = 0.33 10% commission Multiply sales price by 0.10

“T” Formula ________Results________$10,000 Commission Paid Base Rate $100,000 Sales Price .10 (or 10%) Commission Rate Rate is expressed as a decimal Multiply bottom #s or divide top # by bottom # Base X Rate or Results / Base or Results / Rate Results / Base = Rate 10,000 / 100,000 = .10 Results / Rate = Base 10,000 / .10 = 100,000 Results = Base X Rate 10,000 = 100,000 X .10 : : : : X X

$10,000 Commission Paid Results : : Base Rate X $100,000 Purchase Price 10% (.10) Commission Rate

Property sold for $100,000 Commission was $3,000 What was Rate? Results : : Base Rate X

$3,000 Results : : Base Rate X $100,000 0.03

If the numbers are in the wrong place, you will know it $100,000 Results : : Base Rate X $3,000 3333%

Commission was $8,000 Rate was 8% What was price of property? Results : : Base Rate X

$8,000 Results : : Base Rate X $100,000 .08

Seller wants $100,000 Seller said add commission to price Commission is 10% What is selling price? Results : : Base Rate X

$100,000 Results : : Base Rate X 100% - 10% = .90 $111,111

Discount Points 2 points = 2% of prepaid interest Paid $4,000 in discount points How much is loan? Results : : Base Rate X

$4,000 Results : : Base Rate X .02 $200,000

Seller made $25,000 profit on $100,000 sale What is profit % Results : : Base Rate X

25,000 Results : : Base Rate X 100,000 – 25,000 .33 or 33%

Investor expects a 10% ROI (return on investment) Monthly net income is $1,000 What will investor pay for property? Results : : Base Rate X

$1,000 X 12 Results : : Base Rate $120,000 X .10

What did an investor pay if they made 10% And, sold the home for $100,000 Results : : Base Rate X

$100,000 Results : : Base Rate X 100% + 10% = 1.10 $90,909

The value of a house is $91,000 today. What was the original cost if it has depreciated 5% per year for the past seven years? Results : : Base Rate X

$91,000 Results : : Base Rate X 100% - (5% X 7) = .65 $140,000

If a home is worth $91,000 today and has appreciated 5% for the past 7 years, what was the original price? Results : : Base Rate X

$91,000 Results : : Base Rate X 100% + (5% X 7) = 1.35 $67,407

What did the owner originally pay for their home if they sold it for $98,672, which gave them a 12% profit over the original cost? Results : : Base Rate X

$98,672 Results : : Base Rate X $88,100 100% + 12% = 1.12

If you get a 90% loan on a $88,500 house, how much more money must you put down after your $4,500 earnest money? Results : : Base Rate X

$8,850 Results : : Base Rate X $88,500 .10 $8,850 - $4,500 (Earnest Money) = $4,350 Additional $

Capitalization Rate = Return on investment “T” Formula Results Base Rate Investor demands a 10% Return; could be 15% or any number This as the Rate in the “T” Formula - Must change to decimal .10 Rate always goes on bottom right You may not get the net income, but be given the numbers to calculate it The way to calculate net income isGIVEN GI $100,000 Gross Income: 100 apartments renting for $1000 per month V - $5,000Vacancy is 5% (of Gross Income) E- $30,000Expenses are 30% (of Gross Income) N = $65,000 Net Income (Before Taxes) Net income for one month, so multiply by 12 to get annual income = $780,000 $780,000 is the Result,(top #) you know the Rate (bottom right #) is .10 you want the Base (bottom left) Divide the Net Income (Results) of $780,000 by the Rate of .10 : : X

$780,000 Results : : Base Rate .10 X $7,800,000

_____________$780,000___________ $7,800,000 .10 Capitalization Rate in this example is 10% This apartment has a market value of $7,800,000 at a capitalization Rate of 10% What if it sold for $5,000,000? This means that the market (investors) require a higher rate of return of 15.6% Calculator said 0.156 With the “T” Formula, if you get an answer that look wrong, swap the Base # with the Result # and recalculate 7,800,000 / 780,000 would give a rate of return of 1000% and you would know that is wrong Remember to move the decimal point two places to the right to get the percent .10 = 10% : : X

Pre license math review

Recommandé

Recommandé

Contenu connexe

Similaire à Pre license math review

Similaire à Pre license math review (20)

Plus de stevemct

Plus de stevemct (9)

Dernier

Dernier (20)

Pre license math review