A buyer purchases a property for $320,000 with a loan amount of $288,000. Buyer closing costs are $6,250, and the earnest money deposit already paid is $3,000. Ignoring prorations, how much additional cash must the buyer bring to closing?
Correct Answer
C) $35,250
Down payment = $320,000 − $288,000 = $32,000. Then cash to close = $32,000 + $6,250 − $3,000 = $35,250.
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Related Topics & Key Terms
Key Terms:
Related Concepts
IRV stands for Income, Rate, and Value. It represents the relationship between Net Operating Income (I), Capitalization Rate (R), and Property Value (V).
Loan qualification math involves calculating the debt-to-income ratios that lenders use to determine whether a borrower qualifies for a mortgage. The two primary ratios are the front-end (housing expense) ratio and the back-end (total debt) ratio.
Monthly interest is the portion of the total annual interest that is paid or accrued each month.
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