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.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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