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10.3 Closing Costs

10.3 Closing Costs. Vocabulary and Formula. closing costs (p. 349) The costs of transferring ownership of property, such as credit checks and title searches, to the buyer by the seller. Closing Costs = Sum of Bank Fees. Example.

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10.3 Closing Costs

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  1. 10.3 Closing Costs

  2. Vocabulary and Formula closing costs (p. 349) The costs of transferring ownership of property, such as credit checks and title searches, to the buyer by the seller. • Closing Costs = Sum of Bank Fees

  3. Example • The Monroe’s bought a house for $172,000. They put down a 25% down payment. Their bank charges these closing costs on the loan: • 1.75% (of mortgage) loan fee, • 0.3% (of mortgage) stamp fee • $175 title search • $225 appraisal fee • $75 credit report • $375 legal fees • $1,080 property tax What are the closing costs?

  4. Solution • Step One: Find the down payment • .25 x 172,000 • $43,000 • Step Two: Find the mortgage amount • $172,000 - $43,000 • $129,000 • Step Three: Find the closing costs • .0175 x $129,000 = $2257.50 • .003 x $129,000 = $387 • $175, $225, $75, $375, $1,080 • Step Four: Add the costs • $2257.50 + 387 + 175 + 225 + 75 + 375 + 1,080 • $4574.50 • *If it asks for the actual amount with mortgage, add this number to mortgage amount

  5. Assignment • P. 350 1-17all *Use p.349 chart for 1-5

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