Florida Real Estate Broker ExaminationReal Estate CalculationsEasy
A buyer is purchasing a property for $450,000. Their lender requires a 20% down payment. How much will the buyer need to pay at closing for the down payment?
- A$360,000
- B$90,000
- C$45,000
- D$112,500
Show answer & explanationAnswer & explanation
Correct answer: B. $90,000
The down payment is calculated as a percentage of the purchase price. In this case, 20% of $450,000 is $90,000.
Why the other options are wrong
- A. This represents the loan amount, not the down payment.
- C. This would be a 10% down payment, not 20%.
- D. This is 25% of the purchase price, not 20%.
Down Payment Calculation
The down payment is the initial upfront payment made by a buyer when purchasing property, typically a percentage of the total purchase price.
- Expressed as a percentage of the purchase price.
- Reduces the amount of the mortgage loan needed.
- Common percentages vary (e.g., 5%, 10%, 20%).
Memory trick: Don't forget the percentage to purchase!