If one discount point costs the borrower 1% of the loan amount, and increases the lender's
yield by 1/8th of one percent, how many discount points must be purchased to lower the
interest rate by 1%?
1
4
8
16
️: 8
1/8th = 0.125; 1.0 ÷ 0.125 = 8
A five-sided lot has the following dimens...
If a house sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for
$38,600, how much money would be paid in discount points if the lender charged four
points?
$1,600
$1,544
$1,500
$385
✔️: $1,544
One discount point cost the buyer 1% of the loan. $38,600 loan x 0.01 = $386; $386 x 4 =
$1,544.
An apartment building that sold for $780,000 had a monthly gross income of $8,000. What is
its monthly gross rent multiplier?
97.5
62.4
, 103
158
✔️: 97.5
$780,000 ÷ $8,000 = 97.5 GRM
What is 25% converted to a decimal?
25.0
2.50
0.25
0.025
✔️: 0.25
A seller of a property, listed at $200,000, accepted 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
month's interest?
$637.50
$7,650
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