the price of a home is 120000 the bank requires a 10% down payment and 2 points at the time of closing the cost of the home is financed with a 30 year 8.5% how much must be paid for the 2 points at closing and how do I figure that amount
Dn payment = 0.1*12000 = $12,000
Po = 120,000-12,000 = $108,000 =
Amt. Financed.
2 points = 2% of loan amt(Po).
2 Points = 0.02 * Po=.02 * 108000=$2160.
To calculate the amount needed to be paid for the points at closing, we first need to determine the cost of the home by taking into account the down payment and the loan amount.
The down payment is calculated as a percentage of the home price. In this case, the bank requires a 10% down payment, so we can find that amount by multiplying the home price by 10% (or 0.1):
Down payment = 10% of $120,000 = 0.1 * $120,000 = $12,000
Next, we need to calculate the loan amount. The loan amount is the difference between the home price and the down payment:
Loan amount = Home price - Down payment
Loan amount = $120,000 - $12,000 = $108,000
Now we can calculate the cost of the points. Points are a percentage of the loan amount. In this case, 2 points are to be paid at closing.
Points cost = 2% of the loan amount
Points cost = 2% of $108,000 = 0.02 * $108,000
To find the actual dollar amount, we multiply the loan amount by 0.02 (2% expressed as a decimal):
Points cost = $2,160
Therefore, the amount that must be paid for the 2 points at closing is $2,160.