PSI Exam Prep: Real Estate Calculations Flashcards
How do you find the Loan-to-value ratio?
LTVR = (loan amount ÷ value) × 100.
Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she’s current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue’s closing statement?
ax daily rate: ($1,350 ÷ 365 = $3.70) 195 days (days from closing until year end) = a $721.50 seller credit. Any prepaid seller’s homeowners insurance will be refunded to the seller outside closing, so this doesn’t appear on the closing statements.
Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier’s check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What’s the condo’s purchase price in whole dollars?
Subtract the closing costs from cashier’s check amount ($34,450 – $7,950=$26,500) for half of down payment. The total DP was double this ($53,000). Next, divide $53,000 by 20% (to find purchase price ($53,000 ÷ .2=$265,000). Purchase price is $265,000.
The assessed value for your buyer clients’ new purchase is $209,000. They feel they got a great deal since they’re purchasing the property for $175,000. They’ve asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. What is the monthly tax amount your clients owe?
Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes: $209,000 × .52% = $1,086.80, and $1,086.80 ÷ 12 = $90.57.
A real estate transaction has a closing date of May 20. The seller, who’s responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement (round to the nearest dollar).
The seller is required to pay the for January 1 through May 19. The seller will be credited $1,207, because $1,949 ÷ 365 = $5.34, and $5.34 × 226 days (the number of days the buyer is required to pay) = $1,206.84. That’s $1,207 if rounded to the nearest whole dollar.
When doing taxes calculations.. always use
Assess value and appraisal value
