Real Estate Math
An Iowa buyer makes a $5,000 earnest money deposit on a $195,000 home purchase with an 80% conventional loan. How much additional cash does the buyer need at closing for the down payment (not including closing costs)?
A$34,000✓ Correct
B$39,000
C$5,000
D$156,000
Explanation
Down payment = $195,000 x 0.20 = $39,000. The buyer has already deposited $5,000 earnest money (applied to down payment). Additional cash needed = $39,000 - $5,000 = $34,000.
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