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If a buyer was approved for an 80% loan on a purchase price of $117,000. How much would the buyer need to bring closing if their earnest money deposit paid was $4000?

A. $19,400
B. $23,400
C. $18,720
D. $22,600

User Zaan
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1 Answer

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Final answer:

The buyer would need to bring $19,400 to closing, after subtracting the earnest money deposit from the required down payment. The correct option is A.

Step-by-step explanation:

If a buyer was approved for an 80% loan on a purchase price of $117,000, the buyer's loan would cover $93,600 (which is 80% of $117,000).

The buyer needs to provide the remaining 20%, plus the earnest money deposit already paid at closing. To calculate the amount the buyer needs to bring to closing, we first determine the 20% down payment which is $23,400 (20% of $117,000).

Since the buyer has already paid $4,000 as an earnest money deposit, we subtract this amount from the down payment: $23,400 - $4,000 = $19,400. Therefore, the buyer would need to bring $19,400 to closing.

User Nosid
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