A property in Syracuse closes on October 10th. The annual property taxes of $4,680 for the current year have been paid in advance by the seller. Using New York's 360-day statutory year, how much does the buyer owe the seller for the prepaid taxes?
Correct Answer
A) $1,170.00
Daily tax = $4,680 ÷ 360 = $13.00. From October 10 to December 31 = 20 days remaining in October + 30 days each in November and December = 20 + 60 = 80 days remaining. But buyer is responsible starting October 10, so 90 days total for Oct 10-Dec 31. Buyer owes: 90 × $13.00 = $1,170.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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