You want to purchase a house in 10 years. You estimate the cost will be $184,500.00. You want to make a 20% down payment and pay closing costs, which are 8.5%. How much are the down payment and closing costs? How much do you need to save each month to reach your goal?

Question

You want to purchase a house in 10 years. You estimate the cost will be $184,500.00. You want to make a 20% down payment and pay closing costs, which are 8.5%. How much are the down payment and closing costs? How much do you need to save each month to reach your goal?

Answer 1

First, calculate the amount of the down payment. 20% of $184,500 is $36,900.

Next, calculate the closing costs. 8.5% of $184,500 is $15,682.50.

So, the total amount needed upfront is the down payment plus closing costs: $36,900 + $15,682.50 = $52,582.50.

You have 10 years to save for this goal, so divide the total amount needed by 120 months (10 years x 12 months): $52,582.50 / 120 = $438.19.

Therefore, you need to save $438.19 each month to reach your goal of purchasing a house in 10 years.