A Florida buyer is purchasing a $525,000 condo with 15% down. The lender charges 1.5 points on the loan amount. If the buyer also pays $3,200 in other closing costs, what is the total amount of cash needed at closing?
Correct Answer
C) $88,643.75
Down payment: $525,000 × 15% = $78,750. Loan: $525,000 − $78,750 = $446,250. Points: $446,250 × 1.5% = $6,693.75. Total cash to close: $78,750 + $6,693.75 + $3,200 = $88,643.75.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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