California Real Estate Practice Exam

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Prepare for the California Real Estate Exam. Study with flashcards and multiple-choice questions, each question includes hints and explanations. Get ready to ace your exam!

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What is the appropriate buyer's payment for a mortgage tracker if the insurance is $804 and taxes $2700 per year?

$225 monthly for insurance
$225 monthly for taxes
$225 monthly for both insurance and taxes
$225 monthly for either insurance or taxes

The correct answer is: $225 monthly for insurance

To determine the appropriate buyer's payment for the mortgage tracker based on the provided insurance and tax amounts, it is essential to accurately convert the annual payments into monthly figures. The annual insurance payment is given as $804. To find the monthly amount, this figure is divided by 12 (the number of months in a year): \[ \text{Monthly Insurance Payment} = \frac{804}{12} = 67 \] Now, the annual property taxes amount to $2700. Similarly, to calculate the monthly property tax payment, divide this annual amount by 12: \[ \text{Monthly Property Tax Payment} = \frac{2700}{12} = 225 \] The correct calculation shows that the monthly payment for taxes is $225, while the monthly payment for insurance is $67. Thus, the correct choice reflects that the monthly payment for taxes is the significant figure here. The answer highlights the monthly payment exclusively for taxes, demonstrating an understanding of how to breakdown annual figures into monthly obligations within a mortgage context. Other options may misinterpret these calculations by incorrectly attributing monthly payments to either insurance, both items together, or otherwise.