62. A $200,000 home with 20% down and 2 points. Total upfront?
Answer: B
Total upfront cost is $44,000.
To determine the total upfront cost for a $200,000 home with 20% down and 2 points, we first need to calculate the down payment and the points. The down payment is $40,000 (20% of $200,000), and the cost of 2 points (2% of the loan amount) amounts to $4,000. Adding these together gives a total upfront cost of $44,000.
A) $40,000
This option only represents the down payment of 20% on the $200,000 home. It does not include the cost of the points, which is a necessary component of the total upfront costs. Therefore, this option is incorrect.
B) $44,000
This option is correct as it includes both the down payment of $40,000 and the cost of the 2 points, which is $4,000 (2% of the loan amount). Together, these add up to a total upfront cost of $44,000.
C) $40,800
This option inaccurately calculates the total upfront cost. It seems to incorrectly account for an additional amount beyond the down payment and points. Thus, it does not represent the correct total upfront cost for the home.
D) $43,200
This option also miscalculates the total upfront cost. It does not accurately reflect the sum of the down payment and the points. Therefore, it fails to provide the correct total upfront cost for this scenario.
Conclusion
The correct answer is $44,000, which accurately includes both the down payment and the points. All other options fail to encompass the full scope of the upfront costs, either by omitting the points or miscalculating the total. Hence, option B is the only option that correctly reflects the total upfront payment required.