The price of a home is $215,000. The Bank requires 20% down payment and three points at the time of closing. The cost of the home is financed with a 30-year fixed-rate mortgage at 7%. Find down paymen
Loan =(0.80+0.03)215000 = $178,450.
D.P. = 215000 - 178450 = $36,550. = Down
Payment.
Correction:
D.P. = 0.2 * 215,000 = $43,000. = Down
Payment.
Points are a fee that is added to the
D.P. at closing.
Cost of points = .03 * 43000 = $1290.
Tot. D.P. = 43000 + 1290 = $44,290.
To find the down payment for the home, we need to calculate 20% of the total price.
20% of $215,000 = 0.20 * $215,000 = $43,000
Therefore, the down payment for the home is $43,000.
To find the down payment, we first need to calculate 20% of the home's price.
Step 1: Calculate 20% of $215,000:
down payment = 0.2 * $215,000
down payment = $43,000
The down payment required by the Bank is $43,000.
Next, let's calculate the cost of the three points at the time of closing. One point is equal to 1% of the loan amount.
Step 2: Calculate the loan amount:
loan amount = price of the home - down payment
loan amount = $215,000 - $43,000
loan amount = $172,000
Step 3: Calculate three points:
one point = 1% of loan amount
three points = 3 * one point
three points = 3 * 0.01 * $172,000
three points = $5,160
The cost of the three points at the time of closing is $5,160.
Therefore, the down payment required by the Bank is $43,000, and the cost of the three points at closing is $5,160.