Question

Jose decided on purchasing a $145,000 home. At closing he brought a check

for $4645. The closing costs were as follows:

Title Fee

$545

Processing Fee $1975

Appraisal

$675

Based on this information, how many points did Jose purchase?

Answer 1

Answer: 1

Explanation:

Given the following:

Title fee = $545

Processing fee = $1975

Appraisal = $675

Total : $(545 + 1975 + 675) = $3195

Amount of check brought = $4645

Which is in excess of the total:

$(4645 - 3195) = $1450

Cost of home = $145,000

The percentage of the excess paid with respect to the cost of home will give the number of points Jose purchased. They are used to lower the monthly cost of a mortgage.

(Excess amount / cost of home) × 100%

(1450 / 145000) × 100

0.01 × 100% = 1%

The number of points 1 percentage point.