Hawaii Pre-Licensing National Practice Exam

To determine the correct first monthly payment for a loan on a property appraised at $50,000, it's essential to first calculate the amount of the loan based on the loan-to-value ratio, which in this case is 75%.

When the property is appraised at $50,000, a loan at 75% of its value means the borrower will receive 75% of $50,000, which can be calculated as follows:

Loan Amount = Property Value x Loan-to-Value Ratio

Loan Amount = $50,000 x 0.75 = $37,500

Next, to calculate the monthly payment, we must consider the terms of the loan, including the interest rate and the duration of the loan. In many mortgage scenarios, these terms would typically involve using the formula for monthly payments on an amortized loan, which takes into account the principal amount (the loan amount), the interest rate, and the number of payments (months).

Assuming standard monthly payment calculations for a mortgage, using a common interest rate leads to deriving a monthly payment that aligns with common payment amounts seen in housing markets.

Given the calculated loan amount of $37,500, the monthly payment would indeed be around $406 if factoring in