77. A buyer wants to purchase a home for $325,000 with a 30% down payment. The lender charges 2.25 points. How much money does the buyer need up front to make the purchase?
Answer: B
The buyer needs $104,813 up front to make the purchase.
To determine the upfront money required for the home purchase, the buyer must consider both the down payment and the points charged by the lender. A 30% down payment on a $325,000 home amounts to $97,500, and with the addition of 2.25 points on the loan, the total upfront cost is $104,813.
A) $87,500
This option represents only a portion of the required upfront costs. It likely reflects a misunderstanding, as it does not account for the total amount due, including both the down payment and the lender's points. Therefore, this is incorrect.
B) $104,813
This option correctly includes the full amount necessary for the purchase. The down payment of $97,500, which is 30% of $325,000, along with the additional 2.25 points, which total $7,313 ($325,000 x 0.0225), sums up to $104,813. This makes it the correct choice.
C) $95,964
This figure does not accurately reflect the necessary upfront costs. It seems to indicate a miscalculation of either the down payment or the points, as it falls short of the total required amount when both components are considered.
D) $102,619
This option is also incorrect, as it underestimates the total upfront cost. While it might account for part of the down payment and points, it does not reach the correct total of $104,813, indicating an error in calculation.
Conclusion
The correct answer is $104,813, as it accurately encompasses both the down payment and the points charged by the lender. Options A, C, and D fail to provide the complete financial requirement, highlighting the importance of correctly calculating all components involved in a real estate transaction.