A seller of the property listed at $200,000 excepted a 90% offer the home appraised at $185,000 and the buyers obtained a loan for 85% for 3

Question

A seller of the property listed at $200,000 excepted a 90% offer the home appraised at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest what is the first months interest

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niczorrrr 4 years 2021-08-02T17:55:24+00:00 1 Answers 51 views 0

Answers ( )

  1. Sigrid
    0
    2021-08-02T17:57:01+00:00
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    Answer:

    $637.50

    Step-by-step explanation:

    According to the Question,

    • Given That, A seller of the property listed at $200,000 excepted a 90% offer the home appraised at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest

    Thus, the first months interest is

    $200,000 list price x 0.90 = $180,000 contract sales price.

    Since lender always uses the less of the appraised value or the contract sales price, use $180,00 for the remainder of the calculations.

    • $180,000 contract sales price x 0.85 LTV = $153,000 loan.
    • $153,000 loan x 0.05 interest rate = $7,650 annual interest.
    • $7,650 ÷ 12 = $637.50 monthly interest payment for the first month.

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