Total cash needed at closing for a $300,000 purchase with 80% LTV and 3 discount points.

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Study for the Washington Real Estate Fundamentals Rockwell Exam. Utilize flashcards, multiple choice questions with hints and explanations. Prepare thoroughly for your real estate career!

Multiple Choice

Total cash needed at closing for a $300,000 purchase with 80% LTV and 3 discount points.

Explanation:
Total cash needed at closing is the sum of the down payment plus any prepaid points. With an 80% loan-to-value on a $300,000 purchase, the loan amount is 0.80 × 300,000 = 240,000, so the down payment is 300,000 − 240,000 = 60,000. Discount points are prepaid interest, with each point equal to 1% of the loan amount. Three points equal 3% of 240,000, which is 7,200. Add these together: 60,000 + 7,200 = 67,200. The total cash needed at closing is 67,200.

Total cash needed at closing is the sum of the down payment plus any prepaid points. With an 80% loan-to-value on a $300,000 purchase, the loan amount is 0.80 × 300,000 = 240,000, so the down payment is 300,000 − 240,000 = 60,000. Discount points are prepaid interest, with each point equal to 1% of the loan amount. Three points equal 3% of 240,000, which is 7,200. Add these together: 60,000 + 7,200 = 67,200. The total cash needed at closing is 67,200.

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