In today’s episode of “Spruce Answers”your real estate license prep test questions we have a quick one. It reads “Using the services of a mortgage broker, a buyer borrowed $25,000 from a private lender. After the loan costs were deducted, the buyer received $24,255. What is the face value of the note? (Promissory Note)”
Ok here’s another one based on a concept more than actual
math. The concept being tested on is do you know what a note is?
Flashback to the promissory note mentioned in the financing unit.
Flashback to the promissory note mentioned in the financing
OK, so the definition reads “a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.”
So let’s examine the mystery here. Now that we know what a
note is can we break this down? The question states…. “, a buyer borrowed
$25,000 from a private lender. After the loan costs were deducted, the buyer
received $24,255. What is the face value of the note?”
Well think about this in real life
If you borrowed $25,000 would you owe $25,000 or something less than that? Of course you don’t owe less than that, you’d owe the full $25,000. It doesn’t matter the crazy fees that were taken out of the amount prior to you getting the money. So the question states that the buyer received $24,255 (which is the figure thrown in there to make you feel like you’re crazy and has nothing to do with anything) Because the definition of a note is “a written promise to pay a stated sum” NOT WHAT THE PERSON WAS HANDED AFTER FEES. So it’s honestly that simple. The question asks “What is the face value of the note?” and that’s it. Done deal. The FACE value of the note is ….. drum roll $25,000.
Ok, now that you’ve seen the breakdown of this, did you like it’s simple explanation? If so, I think you’ve probably stumbled upon the best resource for your WV real estate license prep, Spruce School of Real Estate. Did you know that Spruce has been teaching online classes for real estate license prep in WV for close to 10 years now and has been teaching IN class for over 25 years! Spruce was the FIRST school native to WV to be approved to teach online in our home state by the West Virginia Real Estate Commission and ARELLO. That says a LOT when you think that they’ve been around to learn the best delivery methods in the fast paces world of online classes!
If you’d like to find out more info on Spruce you can find answers on their home page or feel free to reach out on their Facebook site here.
OK in this episode of “Spruce Answers” we have a pretty hard math question that comes from the darkest depths of your real estate license prep. Let’s jump in and make it easy to understand!
So the question reads…
“If the mortgage loan is 80% of the appraised value of a house and the interest rate of 6% amounts to $460 for the first month, what is the appraised value of the house?”
Now there’s no “easy” way to accomplish this one. Because they want to know TWO unknowns. Real estate license prep all of a sudden seems VERY hard…
You need to find (1)
a mortgage loan amount and once we have that amount we can find (2) an
appraised value… and the ONLY clues it gives is an amount of interest charged per
So let’s break down the question into three parts
The mortgage loan is 80% of the appraised value
The 6% interest rate amounts to $460 for the
What is the appraised value of the house
Now that we see the 3 main parts of this I’d like to introduce a way of mentally converting the English wording of this question into a math equation. Breaking it down in this way allows me to make more sense of what we know and what we don’t know and honestly, I need to break this down as much as possible. Mathematical real estate license prep can become a lot easier is steps.
This English to math breakdown is actually quite easy.
There are two rules:
when we see the word “of” in a question it will
mean (multiply) and
when we see the word “is” it will mean (equals)…
(so using this English to math translation part (1) of our breakdown would become…
Mortgage loan = 80% X Appraised Value
Haha, no, not really because there are TWO unknown values in that equation. If we knew either the mortgage loan amount OR the appraised value then we could solve this using basic algebra, but the problem is they don’t give us that much info. We must solve for one first, so that we can then solve for another in a later step… so let’s look at part (2) of our breakdown and look for clues that can provide us with solving for one of the missing pieces in part (1).
The 2nd part reads “The 6%
interest rate amounts to $460 for the first month”
Well that tells us the interest the loan
charges in ONE MONTH but that’s not enough. We need to know how much interest
it charges in a full year. Now, good for us converting 1 month into 12 months
is easy. We simply take $460 x 12 and that’s the amount for the full year.
460 x 12 = 5,520
We now know that the loan amount produces $5,520
Ok, so that’s an important step so now that we know that the
loan amount produces $5,520 of interest in a year and that’s at a rate of 6% we
can work backwards and figure out the loan amount which is essential for plugging
in the “mortgage loan” amount into the first part of this problem..
So how do we figure out the mortgage loan amount from
knowing that the loan amount produces $5,520 in annual interest and they’re
charging 6% to get that..
Well, is it fair to say
“ 6% of mortgage amount is $5520” ?
And if that’s fair to say, then let’s put that statement
through the English to math translator where we substitute the words “of” and
“is” and here is what we can conclude
6% x Mortgage Amount = $5,520
AND THAT MY FRIENDS IS SOLVE-ABLE real estate license prep
Because we are only missing ONE thing and when we’re missing just ONE thing we can do basic algebra. So let’s go through the basic algebra and solve for the Mortgage amount
Ok, we can write this .06 x Mortgage Amount = $5,520
Now do you remember how to isolate the one side of an
equation from High School? It’s ok, it’s been a while for a lot of us, so let
me refresh your memory if needed.
“It’s only fair to do to one side, what you do to the other side.”
Whatever you do to one side you HAVE to do to the other
side. It’s really that simple. Doesn’t have to be complicated. I’ve been told
by great mathematicians that “it’s only fair to do to one side, what you do to
the other side.”
So as you can see we need to get that .06 OUT of the left
side which we can do by dividing the entire left side by .06. When we do that
the .06 on the left goes away (because it cancels out)…. but to do that we have
to ALWAYS be fair, and do the SAME THING TO THE OTHER SIDE. So in this case we
have to divide the entire right side by .06… which means we divide $5,520 by
Now what’s beautiful here is this now leaves JUST the
Mortgage Amount on the left side and a NICE PLAIN NUMBER ON THE RIGHT SIDE
which turns out to be $92,000… and that means we’ve figured out the mortgage
amount! The mortgage amount is $92,000!!!
Now we can use that figure WAAAAY back in step 1 (from when we broke this down into 3 steps) so glance back at what we stated from step 1. We said
The mortgage loan is 80% of the appraised value.
So plug that statement into our brand new English to Math Translator
So plug that statement into our brand new English to Math
Translator (and substitute “OF” with (multiply), and “is” with “=” and what do
We have “the mortgage loan” = 80% x the Appraised Value
So let’s plug in our newfound mortgage loan amount and write
this like such
92,000 = 0.8 x Appraised Value
We’re only missing ONE real estate license prep math variable!
Now just like earlier WE CAN SOLVE THIS WITH BASIC ALGEBRA because we are only missing ONE THING. And we find this the same way we found the earlier missing one. We isolate one side by dividing it by the amount that is there to cancel it out and then do that to the other side as well… to be fair. 😉
So in this situation we divide the entire RIGHT side by 0.8
so we can ONLY have the Appraised Value over there… and again, anything we do
on one side we HAVE to do on the other side… so we then divide the entire left
side by 0.8
So this looks like this
0.8 x Appraised Value/ 0.8 (on the right side) and 92,000/
0.8 (on the left)
When we divide the right side it cancels out the 0.8 and we
are left with JUST the Appraised Value and that means that the appraised value
is just one step away… by dividing 92,000 by 0.8
When we divide 92,000 by 0.8 we GET $115,000 and THAT IS THE
APPRAISED VALUE and is the answer the question was seeking
To anyone mathematically skilled in real estate license prep
Now, to anyone skilled in Algebra I’m sure this explanation
was tedious and you might’ve even thought that it was too many steps. But
honestly this breakdown is geared for those of us who haven’t seen algebra in a
while… and wanted to see the many inner workings of this fairly complicated real
estate problem… Thanks for bearing with me and I hope this helps someone.
Personally, I love the English to Math translator and it
will be in my arsenal of math tools in the future. “Of” means multiply and “is”
means equal. This MIGHT just help with many insane math problems to come.
If you found this breakdown easy to understand and have always wanted to gain your real estate license in WV look no further! Spruce School of Real Estate has been teaching online real estate classes in West Virginia since online real estate classes “was a thing”. Seriously! Are we showing our age now? Spruce was the first school native to West Virginia to be approved to teach in the distance education method of real estate license prep. For that fact Spruce KNOWS the best ways to deliver in an online world. For more info you can check out their Facebook page here. Their business page is also found here or searched using best real estate school online. Real estate license prep is made as easy as possible with Spruce’s visual showcase of otherwise hard to convey subject matter!
Today in “Spruce Answers” I’m going over the real estate math licensing concept of the discount point. This is easier than you might think . The question is… “If a house was sold for $360,000 and the buyer obtained a mortgage loan for $288,000, how much money would the buyer pay in discount points if the lender charged two points?”
What are the steps to solving this discount point math question?
I like this one because this is a pretty easy question. That is as long as you know the concept of a discount point. And since I’m trying to show how the concepts of these questions can be related to many variations why don’t I illustrate this concept here.
That said, the discount point is one percent…. Now there’s two twists on this within this question. One, it’s giving you two numbers to try and throw you off…. One of which you ignore because, well, it wants 1% of the loan amount and only one of those numbers is the loan amount.
It says the guy obtained a mortgage for $288,000 and that’s the number we now take 1% of. So…
Let’s calculate that… 1% of 288,000 is $2,880
Now the second twist… it says he is getting charged two points…. So… that’s 2%…. The way I do that is simply multiplying 2,880 by 2 which is $5760. Seems way more complicated than it is but if you know that a discount point is 1% you’re good to go.
Is this an easy breakdown?
Now that you’ve seen this breakdown, If you’re looking to get a real estate license in West Virginia you’ve come to the right place. Did you know that Spruce School of Real Estate has been teaching learners how to pass the WV Real Estate License Exam for over 25 years now? It has and we take pride in our presentations and easy breakdown for every kind of learning style. If you found this video tutorial helpful I think you’ll find Spruce School of Real Estate to be a smart choice for helping you learn the sometimes difficult concepts within. Feel free to find out more at https://sprucerealestateschool.com
Feel free to also check us out on Facebook here and get more info on the best real estate school in the state of WV and access to a live instructor 7 days a week.
Difficult Real Estate License Math for your WV Real Estate License
When you’re dealing with difficult real estate license math that we need to get your WV real estate license look no further than the best school for your West Virginia Real Estate License to explain. Honestly, I post these after students request an explanation. Hopefully you can see that enrolling at Spruce School of Real Estate is as valuable as you have heard. We care that much, and we work hard to keep proving that. So, the question handed out was yet again on sections, so let’s go over some background of what we possibly know so we can weed down the difficult portions and leave the easy.
Sections are 640 square acres. How did I know that? Well I could’ve memorized it or I could use some things we should know already. Let me show you how we can know it with just the few memorized numbers we already know. We know that a section is 1 linear mile across AND DOWN correct? We also know that a linear mile is 5,280 feet because of our memory tips in our lovely WV Real Estate Online Class that you registered for.
Ok, so the next step. We know how to calculate square footage which is length times width. That means 5,280 x 5,280 is 27,878,400 and that means that that all sections are 27,878,400 square feet. Yes ALL of them 😉
Now we also know that a square acre is 43,560 feet because of our study tips in class. So if we divide 27,878,400 by 43,560 we get 640. So that means that ALL sections are 640 acres in total. Yes, ALL of them.
Now You See Why a Section is 640 Acres?
So that’s how I knew a section represented 640 acres. OK so lets see what we can do with that number. Sections can be divided into halves (320 acres) and quarters (160 acres). So that’s the easy part. Then it has to get more confusing because EACH of those portions can then be divided again into halves and quarters. But its not terribly hard…. Its basic math. 40 acres here, 40 acres here, 40 acres here, 40 acres here. Do you see the logic? Good!
Now, there a reason I went into all this BEFORE I broke down the super confusing question. And that’s because the super confusing question doesn’t have to be that confusing question IF WE KNOW WHAT I JUST STATED. In the end the question wants us to know how many acres. They give us a bunch of gibberish in there but the reality is they want you to calculate an acreage amount by the price per acre and tell them what that total price was.
So lets look at the question and tear it apart. Let’s make this real estate license math make sense!
If a farm described as “the NW 1/4 of the SE 1/4 of section 10, Township 2 North, Range 3 West of the 6th P.M.”
It reads, If a farm described as “the NW 1/4 of the SE 1/4 of section 10, Township 2 North, Range 3 West of the 6th P.M.” sold for $4,500 an acre, what was the total sales price?
Ok, so lets think about this? They want to know the NW 1/4 of the SE 1/4 . Lets place that on our sections grid to illustrate it. North, south, east, west to help us think it through. We start with the south east quarter so that here. And then they want the north west quarter of THAT, so that’s here.
Now you wanna know something that is crazy? We didn’t even need to map that out. I did because it makes more sense to explain the real estate license math IF we map it out but ALL we needed to know here was that they wanted to know a quarter of a quarter size… Does this look familiar from earlier in the video? Good 😊
So You See the Size is 40 Acres
And guess what? A quarter of a quarter of a section. will ALWAYS BE 40 acres. It doesn’t matter if it said it wanted the SE ¼ of the NW ¼ or the NE ¼ of the SW ¼, or any of that gibberish because all sections are divided up like this and they’re ALL a liner mile up and down, and they’re always gonna be a fixed size.
It also doesn’t matter if the question read:
A farm on Planet Neptune described as “the NW ¼ of the SE ¼ of section 40, Township 20, of the eastern coast of the Bahamas, past the 400th Meridian to the southern lake” BECAUSE IN THE END THEY JUST WANTED TO KNOW THE NUMBER OF ACRES IN A QUARTER OF A QUARTER OF A SECTION.
Basically everything AFTER the description of “NW ¼ of the SE ¼” is totally irrelevant to the size of the acreage we need. We KNOW the size is 40 acres and then just do basic math here. 40 acres times $4,500 is $180,000
Now why did I go over all these steps to show you this? I did it so you can plug in a wide variety of numbers, prices, and scenarios , like they might throw at you at the national testing center and you can still get an answer, regardless of them changing details. Knowing these steps can allow you to answer a wide variety of real estate license math that is dealing with sections and land descriptions now.
By the way, you CAN enroll now to take Spruce’s online real estate classes by visiting https://www.spruceschoolofrealestate.com and clicking “enroll now” It’s THAT easy. You’ll then have access to the instructor for your real estate education needs all the time during your enrollment!
How to Navigate the Identogo Website for your WV Real Estate License Background Check
Okay, here is my new tutorial for how to navigate the identogo website for your WV Real Estate License Background Check. Rather than going to https://identogo.com like I historically told everyone to do. Pop this address in your address bar, https://uenroll.identogo.com . Okay. That is way easier than navigating from https://identogo.com to this page. Both are possible, but this just puts you right here where the service code is needed to be entered.
So now the next hurdle is where do I get my service code?
You get your service code from the applicant background check form for your WV Real Estate License Background Check. You might be asking, where do I get that? Well, we mailed it with your textbook, but if you do not have it, you can download one from the West Virginia Real Estate Commission website.
You HAVE TO BRING THIS FORM TO THE IDENTOGO Appointment
Please do NOT show up at your appointment for your WV Real Estate License Background Check without the form. Go to https://rec.wv.gov and then click on forms. From that page you will find the criminal background check application link. You will click it and then you will get that form. You can print that form out, fill it out, bring it to your identogo appointment and they will know what to do. Again, we did mail you a copy but if you lost it (like me) then here’s your solution.
Why Didn’t They Take My Form?
Often I get asked, hey, they didn’t take the form. What’s up? And the answer is, well, they typed all that information that they needed into the computer and they just handed you your form back. It doesn’t really matter. It just matters that they got the information right here in the middle of the application paperwork with the service code, the agency UEI, the point of contact. That’s the stuff that they type into the computer. Whether or not they keep the form or not, it doesn’t really matter. What matters is that they got the information OFF THE FORM. 🙂
Where Does the Code Go?
So you take the service code which is now being requested on the identogo site. It’s 228Q6K and you go back to your page that you went to, https://uenroll.identogo.com and then you simply a type in or paste your code there. You hit the go button and it’s kinda that simple. Then you can schedule or manage an appointment.
Schedule the Appointment and You’re One Step Closer to Getting your WV Real Estate License!
We want to schedule an appointment. So you click that and from here on out It’s really up to you. You know your first name, I don’t really need to guide you through the rest. Just fill in the form fills as you would anything on the web. Up at the top it shows 228Q6K, and it says West Virginia Real Estate Commission, so you know it’s going into the right place and all is well. Your background check is on it’s way to the WVREC and you’re one more step towards getting your WV Real Estate License. If you didn’t know, Spruce School of Real Estate will walk with you hand in hand from enrollment through your WV Real Estate License testing date like we’ve done with thousands of students over 25 plus years. We’re based out of West Virginia FOR West Virginia Real Estate Licensing.