79. A buyer wants to purchase a home for $300,000 with a 30% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase?
Answer: B
The buyer needs $96,000 up front to make the purchase.
To determine the amount of money the buyer needs up front, we calculate the down payment and the points charged by the lender. The down payment is 30% of $300,000, which equals $90,000. Additionally, the lender charges 2 points on the total loan amount, which is $6,000 (2% of $300,000). Therefore, the total upfront cost is $90,000 + $6,000 = $96,000.
A) 90,000
This option only accounts for the down payment of 30% of the home's price, which is indeed $90,000. However, it does not include the additional cost of the 2 points charged by the lender, which is essential to calculate the total upfront amount required.
B) 96,000
This option correctly combines the down payment and the lender's fees. The down payment is $90,000, and the 2 points amount to $6,000, bringing the total upfront payment to $96,000, which is the correct answer.
C) 100,000
This option is incorrect as it overestimates the total amount needed. It does not accurately reflect the calculations for the down payment and points. The buyer does not need an extra $4,000 beyond the actual sum derived from the down payment and points.
D) 94,200
This option is also incorrect because it does not account for the correct calculation of the points. It suggests an amount that is lower than the actual total required, failing to include the full cost incurred from the lender.
Conclusion
The correct answer is $96,000, which accurately reflects the combination of the down payment and the lender's points. All other options either fail to include the lender's fees or miscalculate the required total, thus confirming that $96,000 is the definitive amount needed up front.