FinancingDeed_of_trust_vs_mortgageMEDIUM
A property in Montgomery County sells for $480,000. The buyer is NOT a first-time homebuyer and takes out a deed of trust loan for $384,000. Maryland's state transfer tax rate is 0.5% of the consideration (purchase price). Under standard Maryland practice where buyer and seller each pay half of the state transfer tax, how much does the buyer pay in state transfer tax at settlement?
Correct Answer
B) $1,200
Maryland state transfer tax is calculated on the purchase price, not the loan amount. The total state transfer tax is $480,000 x 0.005 = $2,400. Under the stated standard split, the buyer pays one-half: $2,400 / 2 = $1,200. The correct answer is B.
Answer Options
A
$960B
$1,200C
$1,920D
$2,400Why This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Financing Question
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Background Knowledge for Financing
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Real World Application in Financing
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Common Mistakes to Avoid on Financing Questions
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Related Topics & Key Terms
Key Terms:
transfer_taxcalculationbuyer_sharestate_transfer_taxnon_first_time_homebuyer
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