Scott is purchasing a home for $220,000. The down payment is 30% and the balance will be financed with a 15-year mortgage at 8% and 4 discount points. Scott made a deposit of $10,000 when the sales contract was signed. If the sellers are responsible for the broker's commission (6% for the purchase price); $1,250 in other closing costs; and the existing mortgage, with a balance of $55,000; what proceeds will they receive on the sale of the property?

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The correct answer is A. The sellers will receive $150,550.00 on the sale of the property.The down payment is 30% of the purchase price, which is $220,000 x 0.30 = $66,000. The balance of the purchase price is $220,000 - $66,000 = $154,000. The mortgage amount is $154,000 x (1 + 0.08 x 15) x (1 - 0.04) = $150,550.00. The sellers will also receive the $10,000 deposit that Scott made when the sales contract was signed. Therefore, the total proceeds that the sellers will receive on the sale of the property is $150,550.00 + $10,000 = $160,550.00.

Scott Is Purchasing a Home for $220,000