answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
olga55
2 months ago
11

Tom and cindy lewis are buying a house with a $300,000 sales price and their ltv will be 80%. assume that they paid no originati

on fees, but paid $3,600 in discount points. how many total points did they pay?
Business
1 answer:
harina [3.8K]2 months ago
7 0

Conclusion: Tom and Cindy paid 1.5 discount points.

House Price = $300,000.

Loan-to-Value Ratio (LTV) = 80%

With an LTV of 80%, the total loan amount (mortgage) is:

Mortgage Value = House Value * LTV

Mortgage Value = $240,000 (300,000*0.80)

In real estate, a point signifies one percent (1%) of the mortgage amount. There is no strict requirement that points be whole numbers.

To calculate the number of points paid, use this method:

No. of points paid = (Value of points in dollars /Value of mortgage) *100

No. of points paid = (\frac{3600}{240000} )* 100 [/tex][tex] No. of points paid = 1.5 points.

There are two point types:

  1. Discount Points: which are actually pre-paid interest on the mortgage loan, assisting in reducing the mortgage's interest rate.
  2. Origination points: which help cover the lender's costs for processing the loan.
You might be interested in
Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common
harina [3808]

Response: a. $18,000

Clarification:

Cumulative Preferred Shares are types of shares whereby the company consistently pays Preferred dividends and if it cannot do so in any given year, the unpaid amount accumulates until they can pay it later.

In the question posed, the dividends owed to Preferred Shares are calculated as follows:

= 4% * 200,000

= $8,000

In the first year, $8,000 was allocated for dividends.

= 8,000 - 8,000

= 0

This implies that there are no preferred dividends owed from Year 1.

In Year 2, $18,000 was declared for dividends,

= 18,000 - 8,000

= $8,000

This indicates that in Year 2, the company managed to fulfill its Preferred dividends and still had funds available to distribute to Common Shareholders.

In Year 3, $24,000 was dedicated to dividends.

= 24,000 - 8,000

= $16,000

Therefore, in year 3, the company had enough funds to cover its Preferred Dividend commitments, meaning it paid out all of the $8,000 due to the Preferred Shareholders.

6 0
1 month ago
Doc's ribhouse had beginning equity of $52,000; net income of $35,000, and dividends by the company of $12,000. calculate the en
stepan [3596]
Doc's ribhouse commenced with $52,000 in equity, generated $35,000 in net income, and distributed $12,000 in dividends. To find the ending equity, use the formula: Beginning Equity + Net Income - Dividends = Ending Equity. Plugging in the values gives us: $52,000 + $35,000 - $12,000 = Ending equity. This results in $52,000 + $23,000 = $75,000, confirming the ending equity is $75,000.
3 0
2 months ago
ABC issued callable bonds on January 1, 2018. ABC's accountant has projected the following amortization schedule from issuance u
arsen [3447]

The gain amounts to $370

Reasoning:

To determine the gain or loss for the date 12/31/2018, according to ABC's amortization schedule

On this date, the carrying value was $196,370 while ABC procured the bonds back for $196,000 on 12/31/2018

Now let’s compute the gain or loss using this formula

Gain/Loss = Carrying value - Bond stock

Substituting into the formula gives us Gain/Loss =$196,370-$196,000

Gain/Loss=$370

Therefore, on the date 12/31/2018, ABC will show a gain of $370

7 0
2 months ago
Draw a graph which depicts long run equilibrium of transnet
stepan [3596]
Although I can't create a graph in this dialog box, I will describe the long-run equilibrium for Transnet. In economics, long-run equilibrium is concerned with the timeframe during which resources are still obtainable, as well as the associated costs and production volumes. 
7 0
3 months ago
a company saw a drop in sales after negative publicity around a scandal involving safetry reports. the strategic changes the com
Mariulka [3825]

Answer:

The question lacks completeness; below is the full inquiry:

A company experienced a decrease in sales following negative press concerning a scandal linked to safety reports. Are the strategic adjustments made by the company to manage this situation reactive changes?

(A) True

(B) False

The right answer is (A) True

Explanation:

This indicates that external factors impacting the company's environment affect the sales of its goods and services.

5 0
1 month ago
Other questions:
  • It is April 19, 2012 and you suddenly remember that your credit card bill is due the next day. You have the money in your checki
    13·1 answer
  • Part U16 is used by Mcvean Corporation to make one of its products. A total of 13,000 units of this part are produced and used e
    12·1 answer
  • Is the futures price of a stock index greater than or less than the expected future value of the index? Explain your answer.
    8·1 answer
  • Innovative Engineering received a promissory note of $15,500 at 11% simple interest for 15 months from one of its customers. Aft
    11·1 answer
  • Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 on January 1, 20X8, when the book v
    6·1 answer
  • Which of these pieces of information would fit in a career plan’s career definition section? Check all that apply.
    10·2 answers
  • The most recent financial statements for Minnie's Manufacturing Co. are shown below: Income Statement Balance Sheet Sales $ 95,4
    11·1 answer
  • As a manager your organization is constantly confronted with a variety of changes in the market or a wide range of situations. Y
    11·1 answer
  • Enlightened marketing calls for building long-run consumer engagement, loyalty, and relationships by continually improving the b
    9·1 answer
  • Classify each transaction as either an operating activity, an investing activity, a financing activity, or a noncash investing a
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!