Using the information from Problem 24, if closing costs are 8.7%, how much additional money do you need to save per month to cover the additional expense?
First, we need to calculate the closing costs based on the price of the home.
Closing costs = 8.7% of $225,000
Closing costs = 0.087 * $225,000
Closing costs = $19,575
Now, we need to determine how much additional money we need to save per month to cover the closing costs. If we assume a one-year savings period, we need to divide the closing costs by 12 months.
Additional money needed to save per month = $19,575 / 12
Additional money needed to save per month ≈ $1,631.25
Therefore, you would need to save an additional $1,631.25 per month to cover the 8.7% closing costs on a $225,000 home purchase.