Hawaii Pre-Licensing National Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Hawaii Pre-Licensing National Exam. Study with flashcards and multiple choice questions, each question provides hints and explanations. Get ready for success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the first monthly payment for a loan on a property appraised at $50,000, granted at 75% of the value with a specific repayment plan?

$306
$406
$500
$600

The correct answer is: $406

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