You are interested in purchasing a home listed at $120,000. The down payment is 30% and the balance will be financed with a 20-year mortgage at 9% and 3 discount points. You put down a deposit (applied to the down payment) of $15,000 when you signed the sales contract. You also have these expenses: credit report, $80; appraisal fee, $100; title insurance premium, 1% of amount financed; title search, $175; and attorneys fees, $600. Find your amount due at the closing.

Question

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First, calculate the down payment: 30% of $120,000 = $36,000. Since you've already put down a deposit of $15,000, you owe $21,000 more for the down payment. The amount financed is 70% of the home price (since you're paying 30% down), which is $84,000. The title insurance premium is 1% of $84,000 = $840. Adding up all the additional expenses: $21,000 (remaining down payment) + $80 (credit report) + $100 (appraisal fee) + $840 (title insurance) + $175 (title search) + $600 (attorney's fees) + $2,520 (3 discount points, which are 3% of the amount financed, $84,000) = $25,315.

You Are Interested in Purchasing a Home Listed at $120,000