An Ohio property has an annual property tax of $7,200 paid in arrears. The closing date is October 1. Using a 360-day year (30 days per month), what is the seller's property tax proration credit to the buyer?
Correct Answer
A) $5,400
Using 360-day year: January through September = 9 months × 30 days = 270 days. Daily rate = $7,200 ÷ 360 = $20/day. Seller's credit = 270 × $20 = $5,400.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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