Math

The price of a home is $320,000. The bank requires an 8% down payment and three points
at the time of closing. The cost of the home is financed with a 30-year fixed rate at 6%.
Find the amount that must be paid for the three points at closing & Find the monthly payment.

  1. 👍
  2. 👎
  3. 👁
  1. Given:
    purchase price = 320,000
    down payment = 8%
    mortgage bought down (to 6%) with 3 points (3%).
    Term, n= 30 years
    rate, i=6% per annum = 6%/12 = 0.005
    compounding frequency = monthly (ASSUMED).

    Solution:
    Down payment = 8% * 320,000 = 25,600
    Loan, P = 320,000 - 25,600 = 294,400
    Cost of 3 points = 3% * 294,400 = 8832 (amount to be paid at closing)

    Monthly payment = Pi(1+i)^(12n)/((1+i)^(12n)-1)
    =294400*0.005*(1.005^(12*30))/(1.005^(12*30)-1)
    =1765.0767
    =1765.08 (to the nearest cent).

    1. 👍
    2. 👎
  2. what problem can solved by using GCF.

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. MATH

    Levi would like to use a credit card to make a $3000 purchase. He is considering two credit options. The first requires a down payment of $1000 followed by monthly payments of $125. The second requires a down payment of $1300

  2. Math

    In 1980 the average price of a home in Brainerd County was $97,000. By 1986 the average price of a home was $109,000 Write a linear model for the price of a home, P, in Brainerd County as a function of the year, t. Let t=0

  3. Math

    The Bainters purchase the $150,000.00 home with a 20% down payment, a 30-year mortgage, and an interest rate of 4.2%. Annual property taxes are $1920.00. Home insurance is $750.00 per year, which is to be placed into an escrow

  4. Financial

    You need a 30-year, fixed-rate mortgage to buy a new home for $235,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 360-month loan. However, you can afford monthly payments of only $925, so you

  1. business mat

    Carol Miller went to Europe and forgot to pay her $740 mortgage payment on her New Hampshire ski house. For her 59 days overdue on her payment, the bank charged her a penalty of $15. What was the rate of interest charged by the

  2. MATH

    The Bainters purchase the $150,000.00 home with a 20% down payment, a 30-year mortgage, and an interest rate of 4.2%. Annual property taxes are $1920.00. Home insurance is $750.00 per year, which is to be placed into an escrow

  3. Business Finance

    Assume a bank loan requires a interest payment of $85 per year and a principal payment of $1,000 at the end of the loan's eight-year life. a) How much could this loan be sold for to another bank if loans of similar quality carried

  4. Math

    Mr. and Mrs. Ogrodnik want to list their house at a price that will net them a minimum of $320,000 after a real estate commission of 5.5% of the selling price. Rounded to the nearest $100, what is the lowest offer they could

  1. MATH

    In order to make some home improvements, a home owner spent $24,000. He paid 18% as a down payment and financed the balance of the purchase with a 36-month fixed installment loan with an APR of 4.5%. Determine the home owner's

  2. Math

    - Anurag is buying a house for $100,000 and needs a mortgage loan. Bank A wants him to repay the loan in 240 months with monthly payment of $600.72. Bank B wants him to repay the loan in 360 months with a monthly payment of

  3. FINANCE

    Now that they have accumulated a deposit of 55,000 Jack and Jill take out a housing loan to purchase a home. The house costs $755,000. It is to be repaid in equal monthly instalments over a term of 30 years. The interest rate

  4. math

    Jon Ericson bought a home with a 11.5% adjustable rate mortgage for 20 years. He paid $10.67 monthly per thousand on his original loan. At the end of 2 years he owes the bank $50,000. Now that interest rates have gone up to 13%,

You can view more similar questions or ask a new question.