Question

For almost all mortgage lenders, a home buyer must put down a certain percentage ofthe selling price towards the sale and financing of a home. Different banks and differentkinds of loans have set standards. Based on the given information, solve the problems.A buyer decides to put a contract on a house he/she would like to purchase. For eachscenario given, find the amount of down payment, the loan amount, the realestate commission, and tax assessment.#1 Selling price is $250,000.00 10% down payment would be $______ the real estate commissionthe seller would pay (at 6% commission) would be $______ and the amount for the mortgage(selling price - down payment) would be $______ House assesses for $245,000.00 and the taxrate is $1.15 per $100.00 of assessed value so taxes on the house would be $_____ for theyear#2 Selling price is $195,000.00 10% down payment would be $______ the real estate commissionwould be (at 6%) $______ and the mortgage amount would be for $_______ House assesses for$189,000.00 and the tax rate is $1.09 per $100.00 so the real estate taxes for the yearwould be $______

Answer 1

(1)

• 10% down payment would be $25,000.

• The real estate commission would be $15,000.

• The amount for the mortgage would be $225,000.

• Taxes on the house would be $2817.50 for the year.

(2)

• 10% down payment would be $19,500.

• The real estate commission would be $11,700

• The amount for the mortgage would be $175,000.

• Taxes on the house would be $2060.10 for the year.

Explanation:

Part 1

The selling price is $250,000.00.

`\begin{gathered} \text{ Down Payment}=10\%\text{ of }250,000 \\ =0.1*250,000 \\ =25,000 \end{gathered}`

• 10% down payment would be $25,000.

`\begin{gathered} \text{ Real Estates Commission}=6\%\text{ of }250,000 \\ =0.06*250,000 \\ =15,000 \end{gathered}`

• The real estate commission the seller would pay (at 6% commission) would be $15,000.

`\begin{gathered} \text{ Mortgage Amount}=\text{ Selling Price}-\text{ Down Payment} \\ =250,000-25,000 \\ =225,000 \end{gathered}`

• The amount for the mortgage would be $225,000.

`Tax=(1.15)/(100)*245,000=2817.50`

• Taxes on the house would be $2817.50 for the year.

Part 2

The selling price is $195,000.00.

`\begin{gathered} \text{ Down Payment}=10\%\text{ of }195,000 \\ =0.1*195,000 \\ =19,500 \end{gathered}`

• 10% down payment would be $19,500.

`\begin{gathered} \text{ Real Estates Commission}=6\%\text{ of }195,000 \\ =0.06*195,000 \\ =11,700 \end{gathered}`

• The real estate commission the seller would pay (at 6% commission) would be $11,700.

`\begin{gathered} \text{ Mortgage Amount}=\text{ Selling Price}-\text{ Down Payment} \\ =195,000-19,500 \\ =175,500 \end{gathered}`

• The amount for the mortgage would be $175,000.

`Tax=(1.09)/(100)*189,000=2060.10`

• Taxes on the house would be $2060.10 for the year.