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 amount of money the buyer needs upfront, we first calculate the down payment, which is 30% of the home price of $325,000, resulting in $97,500. Then, we compute the points charged by the lender, which amount to $7,313. Combining these two figures gives a total upfront cost of $104,813.
A) $87,500
This option represents only the down payment, which is 30% of the home price. While the down payment is $97,500, this option fails to consider the additional cost of the points charged by the lender, thus making it incorrect.
B) $104,813
This amount correctly includes both the down payment of $97,500 and the lender's fees calculated from the points. The points, which are 2.25% of the loan amount ($325,000 - $97,500), total $7,313, leading to a total upfront requirement of $104,813, confirming this option as correct.
C) $95,964
This figure does not accurately represent either the down payment or the total cost including points. It appears to be a miscalculation, as it does not consider the full amount needed for both the down payment and the points, making it incorrect.
D) $102,619
This choice also fails to reflect the accurate sum required. While it may be close to the total, it does not account for the full down payment and points calculation, thus rendering it incorrect.
Conclusion
The correct answer is $104,813, as it encompasses both the necessary down payment and the lender's points. The other options either miscalculate one of these components or fail to include both, ultimately leading to an incorrect total for the buyer's upfront costs.