Humber/Ontario Real Estate Course 3 Exam Practice

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

Prepare for the Humber/Ontario Real Estate Course 3 Exam. Study with challenging questions and detailed explanations to enhance your understanding. Get ready to excel in your exam!

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.

Buyer Carter is considering a lakefront property priced at $600,000 and requires a $334,000 mortgage. The lender offers a three-year term with a 15-year amortization at 7.5% interest rate. With a monthly mortgage payment factor of 9.205137, what will be the monthly payment?

$2,505
$3,075
$3,843
$4,205
$5,000
$5,523

The correct answer is: $2,505

To determine the monthly mortgage payment for Buyer Carter, we utilize the mortgage payment factor provided, which is 9.205137. This factor represents the monthly payment amount per $1,000 of mortgage principal at the given interest rate and amortization period. First, we need to calculate how much Carter's mortgage of $334,000 translates into units of $1,000. This is done by dividing the total mortgage amount by 1,000: $334,000 ÷ $1,000 = 334 Next, we multiply the number of $1,000 units by the monthly mortgage payment factor: 334 × 9.205137 = $3,075.597658 Rounding this amount leads us to approximately $3,076. However, in the context of the multiple-choice options, $3,075 is the closest match and is the expected monthly payment amount. This calculation reflects the total amount payable each month based on the mortgage amount, the interest rate, and the amortization period. Understanding this method is critical, as it allows prospective buyers to evaluate their affordability in the context of different financing options and payment structures.