Asked by Yakyra Shelton on Jun 15, 2024
Verified
Aja made a 20% down payment on a house and was approved for a $185,000 mortgage.Therefore,she should expect her closing costs to be about $3,700 to $12,950.
Down Payment
The upfront money applied to a purchase that is made using a loan (credit).
Mortgage
A loan specifically used to purchase real estate, where the property itself serves as collateral until the loan is repaid.
Closing Costs
Costs that are paid at closing that include origination fees, attorney fees, points, prepaid interest, transfer tax, and title insurance.
- Master the essentials of financial math, focusing on percentage-based calculations and proportion determination.
- Absorb knowledge on the financial constituents of real estate investment, focusing on equity, the mechanics behind mortgages, and the calculation of interest rates.
Verified Answer
NP
Nayda PeaceJun 16, 2024
Final Answer :
True
Explanation :
Typically, closing costs are about 2-5% of the total loan amount. In this case, Aja made a 20% down payment on a $185,000 mortgage, which means her loan amount would be $148,000. Using the 2-5% range, her estimated closing costs would be between $2,960 and $7,400. Therefore, the statement is true.
Learning Objectives
- Master the essentials of financial math, focusing on percentage-based calculations and proportion determination.
- Absorb knowledge on the financial constituents of real estate investment, focusing on equity, the mechanics behind mortgages, and the calculation of interest rates.
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