Question

Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen year loan. What is the maximum commission for Broker Burns?

Answer 1

Ten percent of the principal of the loan.

Step-by-step explanation:

In this scenario, the maximum commission for Broker Burns is Ten percent of the principal of the loan. That is because when dealing with a first trust deed loan the commission is determined by the length of time of the loan. In which the percentages are as follows: 5 percent of the principal for loans of less than 2 years; 5 percent for loans of more than 2 years but less than 3; 10 percent for loans of 3 years or more. Therefore, since the loan in this scenario is for 15 years then the percentage is 10%