Pat bought a home for $75,000. He put up $5,000 earnest money and secured an 80% loan. The bank charged four points and a 2.5% loan fee. Pat received a $900 credit from the proration of taxes. How much cash will he need to bring to close this transaction?
A) $13,000
B) $13,900
C) $13,975
D) $18,000

Question

Quizplus · Accepted Answer

Pat has agreed to pay $75,000 but the lender will supply 80% or $60,000;so the down payment is 75,000 - 60,000 = 15,000. Add to that 60,000 × .025 or 1,500 in loan fees and 60,000 × .04 or 2,400 as points and subtract 900 (tax credit)and subtract $5,000 because he has already deposited that much as earnest money;15,000 + 1,500 + 2,400 - 900 - 5,000 = 13,000.

Pat Bought a Home for $75,000