64. A home is being purchased for $275,000. The buyer agrees to an 80% loan, what amount will the buyer have to have to meet the down payment requirements?
Answer: C
The buyer will have to have $55,000 to meet the down payment requirements.
To calculate the down payment required for an 80% loan on a home priced at $275,000, one must first determine the loan amount, which is 80% of the purchase price. The remaining 20% will constitute the down payment, which equals $55,000.
A) $45,000
This option is incorrect because a down payment of $45,000 would represent only 16.36% of the total purchase price of $275,000, which does not meet the requirement for a 20% down payment.
B) $50,000
This option is also incorrect. A down payment of $50,000 would be approximately 18.18% of the total purchase price, which is still less than the required 20% for an 80% loan.
C) $55,000
This is the correct answer. A down payment of $55,000 represents exactly 20% of the $275,000 home price, aligning perfectly with the requirement for an 80% loan.
D) $60,000
This option is incorrect, as a down payment of $60,000 would be 21.82% of the total purchase price. While it exceeds the required amount, it is not the precise figure needed for an 80% loan scenario.
Conclusion
The correct down payment amount of $55,000 directly corresponds to the required 20% of the home's purchase price when financing 80% through a loan. All other options do not meet this critical percentage, making them invalid choices for the down payment requirement.