New Jersey Real Estate Practice Exam Free Practice Question
A married couple is planning to purchase a house that costs $86,000. If they obtain a 60% loan and the lender charges a 2.5% loan origination fee and 0.5 discount points, what is the cost of these expenses?
Correct Answer: D
Rationale: To determine the cost of the loan origination fee and discount points, first calculate the loan amount. A 60% loan on an $86,000 house is $51,600. The loan origination fee is 2.5% of the loan amount, which equals $1,290 ($51,600 x 0.025). The discount points are 0.5% of the loan amount, amounting to $258 ($51,600 x 0.005). Adding these together gives $1,290 + $258 = $1,548, which corresponds to option B, not D.
However, if the question intended to ask for additional costs or miscalculated the percentages, it would need clarification. Options A and C are incorrect as they do not accurately reflect the calculations based on the provided percentages. Hence, option B remains the most accurate based on the calculations given.
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