Question

1. marty obtained a mortgage of $287,000 to purchase his home. the loan origination fee is 3.5 points. what is the amount of the loan origination fee?

options: $11,149; $13,195; $12,350; $10,045

Explanation:

Step1: Understand "points" in mortgage

1 point = 1% of the loan amount. So 3.5 points = 3.5% or 0.035 in decimal.

Step2: Calculate the fee

Multiply the loan amount by the decimal equivalent of the points.
Loan amount = $287,000, Rate = 0.035
Fee = $287,000 × 0.035
$287,000 × 0.035 = $10,045? Wait, no, wait: 287000 0.035. Let's recalculate: 287000 3.5 / 100. 287000 / 100 = 2870, then 2870 3.5 = 28703 + 28700.5 = 8610 + 1435 = 10045? Wait, but wait, maybe I made a mistake. Wait, 287000 0.035: 287000 0.03 = 8610, 287000 0.005 = 1435, so 8610 + 1435 = 10045? But the options have $10,045 as one of them. Wait, but let me check again. Wait, 3.5 points is 3.5% of the loan. So 287000 * 0.035. Let's compute 287000 * 3.5: 287000 * 3 = 861000, 287000 * 0.5 = 143500, sum is 861000 + 143500 = 1,004,500. Then divide by 100 (since it's a percentage) gives 10,045. Yes. So the fee is $10,045? Wait, but wait, the options: $10,045 is an option. Wait, but let me check again. Wait, 287000 * 0.035: 287000 * 0.035. Let's do 287000 * 35 / 1000 (since 0.035 = 35/1000). 287000 / 1000 = 287, 287 * 35 = 10,045. Yes. So the loan origination fee is $10,045. Wait, but the options have $10,045 as D? Wait, the last option is $10,045. So that's the answer.

Answer:

\$10,045 (Option: D. \$10,045)