Nationwide Mortgage Licensing System (NMLS) Practice Exam

If the purchase price is $150,000 and the loan amount is $100,000 at a 6% interest rate, how much mortgage interest must be paid at closing with 10 days left in the month?

1. $164.38

2. $250.00

3. $440.20

4. $2,739.73

The correct answer is: $164.38

To determine the mortgage interest that must be paid at closing with 10 days left in the month, we first need to calculate the daily interest on the loan. The loan amount is $100,000, and the interest rate is 6%. To find the daily interest: 1. Convert the annual interest rate to a daily rate by dividing by 365 (the typical number of days in a year): \( 6\% = 0.06 \) Daily interest rate = \( \frac{0.06}{365} \approx 0.000164384 \) 2. Next, calculate the daily interest amount by multiplying the daily rate by the loan amount: Daily interest = \( 100,000 \times 0.000164384 \approx 16.44 \) 3. Multiply the daily interest by the number of days left in the month, which is 10: Mortgage interest for 10 days = \( 16.44 \times 10 \approx 164.38 \) Thus, the amount of mortgage interest to be paid at closing is approximately $164.38, aligning perfectly with the answer choice. This computation shows how daily interest accrued on the loan for the remaining