Question

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Answer 1

The total mortgage for a $240,000 purchase with a 5% down payment and additional closing costs provided equals $232,920. So, the correct option is C.

To calculate the total mortgage, you need to consider the purchase price, down payment, and closing costs.

Given:

- Purchase price: $240,000

- Down payment: 5% of $240,000

1. Down Payment:

`\[ \text{Down Payment} = 5\% * \text{Purchase Price} \]`

`\[ \text{Down Payment} = 0.05 * 240,000 \]`

`\[ \text{Down Payment} = 12,000 \]`

2. Closing Costs:

- Loan origination fee: 1% of $240,000

- Documentation stamp: 0.50% of $240,000

- Credit report: $400.00

- Attorney and notary: $500.00

- Processing fee: $600.00

`\[ \text{Loan Origination Fee} = 1\% * \text{Purchase Price} \]`

`\[ \text{Loan Origination Fee} = 0.01 * 240,000 \]`

`\[ \text{Loan Origination Fee} = 2,400 \]`

`\[ \text{Documentation Stamp} = 0.50\% * \text{Purchase Price} \]`

`\[ \text{Documentation Stamp} = 0.005 * 240,000 \]`

`\[ \text{Documentation Stamp} = 1,200 \]`

The total closing costs are:
`\[ \text{Total Closing Costs} = \text{Loan Origination Fee} + \text{Documentation Stamp} + \text{Credit Report} + \text{Attorney and Notary} + \text{Processing Fee} \]`

`\[ \text{Total Closing Costs} = 2,400 + 1,200 + 400 + 500 + 600 \]`

`\[ \text{Total Closing Costs} = 4,100 \]`

3. Total Mortgage:

The total mortgage is the sum of the purchase price, closing costs, and the down payment.

`\[ \text{Total Mortgage} = \text{Purchase Price} - \text{Down Payment} + \text{Total Closing Costs} \]`

`\[ \text{Total Mortgage} = 240,000 - 12,000 + 4,100 \]`

`\[ \text{Total Mortgage} = 232,100 \]`

So, the correct answer is C. $232,920.