Closing Cost
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Closing Cost pp. 349-350 10- 3 SECTION
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SECTION. 10-3. pp. 349-350. Closing Cost. Figure out: total closing costs. Section Objective. Key Words to Know. closing costs (p. 349) The costs of transferring ownership of property, such as credit checks and title searches, to the buyer by the seller. Formula. - PowerPoint PPT Presentation
Transcript of Closing Cost
Closing Cost pp. 349-35010-3SECTIONSECTION
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Section ObjectiveSection ObjectiveFigure out:
• total closing costs
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closing costs (p. 349)
The costs of transferring ownership of property, such as credit checks and title searches, to the buyer by the seller.
Key Words to KnowKey Words to Know
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Closing Costs = Sum of Bank Fees
Formula Formula
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Why might the lender charge additional costs (over and above the loan documents)?
The Hunt to Find a Home p. 349The Hunt to Find a Home p. 349
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Trudy and Germane Hallett have been granted a mortgage loan at an annual interest rate of 8 percent for 25 years by State Bank. The home has a selling price of $95,500. They need a 15 percent down payment. State Bank will allow them to finance the closing costs as part of the mortgage.
What are the total closing costs?
What is actual amount financed with the mortgage?
Example 1Example 1
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Find the down payment.
$95,500 × 15% = $14,325
Example 1 Answer: Example 1 Answer: Step 1Step 1
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Find the amount of the mortgage.
$95,500 – $14,325 = $81,175
Example 1 Answer: Example 1 Answer: Step 2Step 2
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Find the closing costs.
Example 1 Answer: Example 1 Answer: Step 3Step 3
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Find the actual amount financed.
Amount of Mortgage + Closing Costs
$81,175 + $3,194.96 = $84,369.96
Example 1 Answer: Example 1 Answer: Step 4Step 4
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Joseph and Marla Liebowitz have agreed to purchase a house for $362,000. They made a down payment of 30 percent and are financing the remaining amount. The total closing costs are 3.25 percent of the mortgage loan.
What are the closing costs?
What is the total mortgage loan?
Practice 1Practice 1
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Closing costs: $8,235.50
Total mortgage loan: $261,635.50
Practice 1 AnswerPractice 1 Answer
Closing Costs10-3END OF SECTIONEND OF SECTION
