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Question

Kyung Ja and Hideo Hakola have been granted a mortgage loan at an annual interest rate of 7.5 percent for 15 years by USA Mortgage. The home has a selling price of $105,000. They need a 10 percent down payment USA Mortgage will allow them to finance the closing costs as part of the mortgage. Use the table below to find the total closing costs. What is the actual amount financed with the mortgage?

Closing Costs | |
---|---|

Credit report | $65.00 |

Loan origination | 2% of mortgage |

Abstract of title | 120.00 |

Attorney fee | 250.00 |

Documentation stamp | 0.3% of mortgage |

Processing fee | 1.10% of mortgage |

Total Closing Costs | $3,194.96 |

Solution

VerifiedStep 1

1 of 5$\$105,000\times 10\% = \$105,000 \times 0.10 = \$10,500$

The down payment is the product of the selling price and the down payment percentage.

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