Question

A man is purchasing a house for $325,000. His lender requires a 20 percent down payment and 2 points at closing. The man is also responsible for $2,000 in closing costs. What is the total amount of money he needs to close?

Answer 1

Answer:

$73,500

Explanation:

the man needs enough money to cover:

• down payment = $325,000 x 20% = $65,000
• closing points = $325,000 x 2% = $6,500
• closing costs = $2,000
• total = $73,500

The closing points are generally paid to the mortgage lender in order to lower the mortgage's interest rate which will result in a lower monthly payment.