I PASSED

[hal]

Thanks guys for all your help. I passed the Michigan Exam Monday, but it was not a breeze for me. I had spoken to someone else who took the exam a week or two ago and he told me about a question that he could not get and I think I got the question too. Someone help me with this it is still on my mind. Here it is.

A buyer is buying a loan at 13% (.0------- a number from tables)for 50,000 over 25 years. The seller is going to buydown the loan to 12% (.0------- another number from the tables). How much will this be worth. (The question went something like that)


Then I got another question and I really got concerned. Here is how it went.

Take the same info for the question above and the question is how many points did this save.

I did not see any questions like this in my study material and I studied from Harrisons and another question book, Prelicensure material and book, topics from an Appraisal Institute book and other tidbits here and there. This was a loaded question or I just missed the boat. my hp was ready but my input and output was way off.

 

[Mike Garrett RAA]

Not enough info to solve your problem.

In the real world it would go something like this.

Two identical homes sold. One sold for $3,000 more than the other. The only difference was the home that sold for more had a 1% interest buydown. In this case, the appraiser would adjust the comparable downward by $3,000 to reflect the concession.

Ask yourself this question....

If I was going to buy a home, how much would I pay to buy the loan down from 13% to 12%. The first thing to do is compare the payments. Lets say there is a $20 dollar difference in the monthly payment. How long would it take for me to recover my investment? Since most homes turn over every 6 to 7 years..at $20 a month it would take 12.5 years to recover the $3,000...probably not a good deal.

The primary reason for buying down a loan is to make it easier for the purchaser to qualify for the loan.