A Memphis home sells for $250,000. The buyer obtains a deed-of-trust loan for 80% of the purchase price. The seller must pay the Tennessee realty transfer tax of $0.37 per $100 (or fraction thereof) based on the full sale price. What is the seller's transfer tax obligation?
Correct Answer
C) $925.00
Tennessee's realty transfer tax is $0.37 per $100 of consideration based on the full sale price (not the loan amount). $250,000 / $100 = 2,500 units; 2,500 x $0.37 = $925.00.
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Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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