A buyer in Orange County is purchasing a home for $295,000 with a conventional loan of $236,000. The lender requires: 1% origination fee, 0.5% discount points, $450 appraisal, $35 credit report, and $95 flood certification. The title company charges $1,100 for owner's title insurance and $650 for lender's title insurance. The buyer will also pay $375 for a home inspection. What is the buyer's total closing costs for these items?
Correct Answer
C) $7,245
Correct: C - $7,245. Origination: $236,000 × 1% = $2,360. Points: $236,000 × 0.5% = $1,180. Why not A: This option is incorrect because "$6,245" does not match the rule tested by the question. The correct answer is "$7,245". Origination: $236,000 × 1% = $2,360. Points: $236,000 × 0.5% = $1,180. Why not B: This option is incorrect because "$6,620" does not match the rule tested by the question. The correct answer is "$7,245". Origination: $236,000 × 1% = $2,360. Points: $236,000 × 0.5% = $1,180. Why not D: This option is incorrect because "$7,620" does not match the rule tested by the question. The correct answer is "$7,245". Origination: $236,000 × 1% = $2,360. Points: $236,000 × 0.5% = $1,180.
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Previous Question
An investor in Sarasota is purchasing a commercial property for $1,200,000 with owner financing. There will be no traditional lender involved. The parties have agreed that the buyer will pay for the survey ($2,500), environmental assessment ($5,000), and attorney fees ($3,500), while the seller will pay for title insurance and deed preparation. What is the primary difference in closing costs compared to a traditional financed transaction?
Next Question
A buyer purchases a home for $325,000 with a 10% down payment. The buyer also pays 2 points on the loan amount. If each point equals 1% of the loan amount, what is the total cash needed at closing for down payment and points combined?