New Jersey Real Estate License Exam Practice Question
A buyer wants to purchase a home for $225,000 with a 15% down payment. The lender charges 1.75 points. How much money does the buyer need up front to make the purchase?
Correct Answer: B
Rationale: To determine the upfront money needed for the home purchase, calculate the down payment and the points charged by the lender. The down payment is 15% of $225,000, which equals $33,750. The lender charges 1.75 points on the loan amount, which is 1.75% of the mortgage. The mortgage amount after the down payment is $191,250 ($225,000 - $33,750). Thus, the points amount to $3,344.38 ($191,250 x 0.0175). Adding the down payment and points gives $37,094.38, rounded to $37,097.
Options A, C, and D do not account for the points correctly, leading to incorrect total amounts.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now