A borrower's monthly interest payment is $1,500 on an interest-only loan at 6% annual interest. What is the outstanding loan balance?
Correct Answer
A) $300,000
Step 1: Annual interest = $1,500 × 12 = $18,000. Step 2: Loan balance = Annual interest ÷ Rate = $18,000 ÷ 0.06 = $300,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commission splits refer to the division of the total real estate commission among the listing and selling brokerages, and then between each broker and their respective agents. Commission rates and splits are always negotiable.
Determining ownership days involves calculating the number of days each party (buyer and seller) owned the property during the relevant period (usually a year). This calculation is crucial for accurate proration.
The gross rent multiplier (GRM) is a quick method for estimating the value of income-producing property by multiplying the property's gross rent by a factor derived from comparable sales. GRM = Sale Price / Gross Rent.
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