SOLUTION: bob owen is closing a real estate transaction on a farm in Yocona, Mississippi, for 385,900. his mortgage holder requires a 25% down payment and he also must pay 60.00 to record t

Question 277018: bob owen is closing a real estate transaction on a farm in Yocona, Mississippi, for 385,900. his mortgage holder requires a 25% down payment and he also must pay 60.00 to record the deed, 100 in attorney's fees for document preparation, and 350 for an appraisal report. Bob will also have to pay a 1.5% loan origination fee. Bob chooses a 35 year mortgage at 7%. How much cash will bob need to close on the property?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
Cost of farm is $385,900.

25% down payment = .25 * $385,900 = $96,475
cost to record deed = $60
attorney's fees = 100
appraisal report = 350

1.5% loan origination fee = ????? (see below).

cost of farm is $385,900
Down Payment is $96,475
Mortgage will be $385,900 - $96,475 = $289,425
1.5% of $289,425 will be $4341.375

Amount of cash Bob will need to close on the property is:

$96,475 + $60 + $100 + $350 + 4,341.38 = $101,326.38

The payments on the mortgage will be approximately $1,819.01 per month.

That's based on end of month payments at 7%/12 = .58333333% per month for 35*12 = 420 months.

The mortgage payments are NOT part of the up front costs required for closing.

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