Question

The Z family purchased their first home for $160,500. They got an 85% loan and paid two discount points. They had additional closing costs of $3,250. How much cash did they have to bring to settlement?

(a) $30,053.50
(b) $25,000.10
(c) $25,450.25
(d) $28,617.00

Answer 1

To calculate the cash that the Z family had to bring to settlement, we need to consider the purchase price, loan amount, discount points, and closing costs. The cash they had to bring to settlement is $142,403.50.

Step-by-step explanation:

To calculate the cash that the Z family had to bring to settlement, we need to consider the purchase price, loan amount, discount points, and closing costs.

The purchase price of the house is $160,500. They got an 85% loan, which means they borrowed 85% of the purchase price. That is 0.85 x $160,500 = $136,425.

They also paid two discount points, which is equal to 2% of the loan amount. This is 0.02 x $136,425 = $2,728.50.

In addition to the loan amount and discount points, they had closing costs of $3,250.

Therefore, the total cash they had to bring to settlement is: $136,425 + $2,728.50 + $3,250 = $142,403.50.

So, the correct answer is (a) $30,053.50.