Question

Rosa is buying a $190,000 home. She has decided to purchase 2 points in order to lower her interest rate. The appraisal fee is $450, the processing fee is $575, and the title fee is $600. What is her total in closing costs?

A. $1625

B. $5425

C. $3525

D. $2005

Answer 1

C. `$3525`

Explanation:

Mortgage/discount points amount to `1%` of the mortgage amount. Assuming there is no down payment (not possible anywhere near where I live) then the mortgage amount would be
`$190,000`
So the cost of the discount points would be
`color(white)("XXX")$190,000 xx 1/100=$1900`

#{: ("Cost of points:",$1900), ("Appraisal fee:",$color(white)(1)450), ("Processing fee:",$color(white)(1)575), (ul("Title fee:"color(white)("xxxx")),ul($color(white)(1)600)), (color(red)("Total closing cost:"),color(red)($3525)) :}#