Brianna is buying a house for $190,000. She plans to make a 14% down payment. Closing...

Brianna is buying a house for $190,000. She plans to make a 14% down payment. Closing costs include $400 for 6 months of homeowners insurance, $1200 for 6 months of property tax, $125 for the title fee, and $450 in transaction fees. Brianna also agreed to pay two points in exchange for a 0.5% reduction in interest rate. Determine the amount of money Brianna needs to cover closing costs. Round your answer to the nearest cent.

Expert Solution

Given,

Cost of house= $190,000

Down payment=14%

Therefore, net loan amount=190000*(1-14%)= $163,400

Closing Costs:

Points= 2

Amount in lieu of points= Loan* Points% = 163400*2% = $3,268

Homeowners insurance= $400

Property tax= $1,200

Title fee= $125

Transaction fees= $450

Total closing costs= 3268+400+1200+125+450= $5,443.00

jeff jeffy answered 2 years ago

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