David is purchasing a house in Rochester for $285,000. He is obtaining an FHA loan with a 3.5% down payment. What is the amount of his down payment?
Correct Answer
A) $9,975
Down payment = Purchase price × Down payment percentage = $285,000 × 3.5% = $285,000 × 0.035 = $9,975.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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