Real Estate Math
A buyer's closing costs total $8,500 plus a 3.5% down payment on a $280,000 home. How much cash does the buyer need to bring to closing?
A$18,300✓ Correct
B$15,555
C$21,045
D$16,836
Explanation
Down payment = 3.5% × $280,000 = $9,800.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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