Question

They made an offer of $430,320.80 and the seller accepted. Their lender would charge them 1 point for a mortgage fee if they put down 18% of the selling price. The couple would also pay $219 and $482 for the legal fees and the remaining expenses. What would be the amount of cash the couple needs to buy the home? (Round your answer to the nearest cent.)

Answer 1

The couple needs a total cash amount of $81,688.37 to cover the down payment, mortgage fee, legal fees, and other expenses when buying the home. This includes an 18% down payment, 1% mortgage fee, and flat legal and other expenses combined.

Step-by-step explanation:

The couple needs to calculate the total amount of cash required to buy a home which includes the down payment, mortgage fee (points), legal fees, and other expenses. To do this, we first calculate the down payment which is 18% of the offer price ($430,320.80), then we add 1% of the mortgage amount for the mortgage fee, and finally, we add the legal fees and remaining expenses.

Down payment: 0.18 × $430,320.80 = $77,457.74
Mortgage amount: $430,320.80 - $77,457.74 = $352,863.06
Mortgage fee (1 point): 0.01 × $352,863.06 = $3,528.63
Total legal fees and expenses: $219 + $482 = $701
Total cash needed: $77,457.74 (down payment) + $3,528.63 (mortgage fee) + $701 (legal and other expenses) = $81,688.37.
After rounding to the nearest cent, the couple would need $81,688.37 in cash to buy the home.