Finding your own place is
exciting, but it is also a big
What are some costs
associated with renting or
buying a home?
Calculate the total closing costs.
closing costs closing costs
Costs associated with the transfer of
property from the seller to the buyer,
which may include fees for the property
survey, loan application, document
preparation, and points.
Trudy and Germane Hallett have been granted a
mortgage loan at an annual interest rate of 8
percent for 25 years by State Bank. The home has a
selling price of $95,500. They need a 15 percent
down payment. State Bank will allow them to
finance the closing costs as part of the mortgage.
What are the total closing costs?
What is actual amount financed with the mortgage?
Example 1 Answer: Step 1
Find the down payment.
$95,500 × 15% = $14,325
Example 1 Answer: Step 2
Find the amount of the mortgage.
$95,500 – $14,325 = $81,175
Example 1 Answer: Step 3
Find the closing costs.
Example 1 Answer: Step 4
Find the actual amount financed.
Amount of Mortgage + Closing Costs
$81,175 + $3,194.96 = $84,369.96
Joseph and Marla Liebowitz have agreed to
purchase a house for $362,000. They made a down
payment of 30 percent and are financing the
remaining amount. The total closing costs are 3.25
percent of the mortgage loan.
What are the closing costs?
What is the total mortgage loan?
Practice 1 Answer
Closing costs: $8,235.50
Total mortgage loan: $261,635.50