Question

Joy and John MacAllister have agreed to purchase a housefor $379,900. First National Savings & Loan is willing tolend the money at 6.5% for 25 years, provided theMacAllisters can make a $79,900 down payment. The totalclosing cost is 3.5% of the amount of the mortgage. What isthe total closing cost?

Answer 1

First determine the amount of the mortgage

379000- downpayment

379,900 - 79900 = 300000

The closing costs are 3.5% of this amount

300,000 * 3.5%

300,000 * .035

10500

The closing costs are $10,500