Question

The buyer's costs are a $360,000 purchase price, a $3,180 origination fee, $400 for a lender's policy of title insurance, $300 for an appraisal, $430 for property taxes in advance, and $555 for hazard insurance. She has put down a $12,000 earnest money deposit and is receiving a $318,000 loan. What is the cash balance required from the buyer at closing

Answer 1

Answer:

The cash balance required from the buyer at closing is $34,865.

Explanation:

The cash balance required from the buyer at closing is the excess of his expenses over his receipts. This can be calculated as follows:

Particulars                                                $                        $            

Receipts:

Earnest money deposit                      12,000

Loan received                                   318,000  

Total receipts                                                                  330,000

Expenses:

Purchase price                                (360,000)

Origination fee                                     (3,180)

Lender's policy of title insurance          (400)

Appraisal                                                 (300)

Property taxes in advance                     (430)

Hazard insurance                                  (555)  

Total expenses                                                                (364,865)  

Balance required                                                             (34,865)  

Therefore, the cash balance required from the buyer at closing is $34,865.