Tennessee Realtor State Practice Exam

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Prepare for the Tennessee Realtor State Exam with questions and explanations designed to help you succeed. Master the principles and regulations of real estate in Tennessee. Ace your exam with confidence!

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If a buyer is purchasing a property for $500,000 with a down payment of $50,000, how much is the loan origination fee if the lender charges one-and-a-half points?

$5,000
$7,500
$6,750
$9,000

The correct answer is: $6,750

To determine the loan origination fee when the lender charges one-and-a-half points, it is essential to first understand that a "point" is equal to 1% of the loan amount. In this scenario, the property’s purchase price is $500,000, and the buyer is putting down a down payment of $50,000. To calculate the loan amount, subtract the down payment from the purchase price: Loan Amount = Purchase Price - Down Payment Loan Amount = $500,000 - $50,000 Loan Amount = $450,000 Next, we calculate the loan origination fee. Since the lender charges one-and-a-half points, we can determine that the fee is calculated as follows: Loan Origination Fee = Loan Amount x Points Loan Origination Fee = $450,000 x 1.5% Loan Origination Fee = $450,000 x 0.015 Loan Origination Fee = $6,750 Thus, the correct answer is $6,750, which reflects the total amount that the buyer will need to pay for the loan origination fee based on the terms given by the lender.