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Question Calculate the total mortgage for a $280,000\$ 280,000 home purchase with a 5%5\% down payment and the given closing costs: $100\$ 100 credit report, 1%1\% loan origination fee, $500\$ 500 attorney/notary, 0.50%0.50\% documentation stamp, and $600\$ 600 processing fee.

Studdy Solution

STEP 1

Assumptions1. The purchase price of the house is $280,000. The down payment is5% of the purchase price3. The closing costs are as shown in the table4. The loan origination fee is1% of the loan amount5. The documentation stamp fee is0.50% of the loan amount

STEP 2

First, we need to calculate the down payment amount. This can be done by multiplying the purchase price by the down payment rate.
Down payment=Purchase pricetimesDown payment rateDown\, payment = Purchase\, price \\times Down\, payment\, rate

STEP 3

Now, plug in the given values for the purchase price and down payment rate to calculate the down payment.
Down payment=$280,000times5%Down\, payment = \$280,000 \\times5\%

STEP 4

Convert the percentage to a decimal value.
%=0.05\% =0.05Down payment=$280,000times0.05Down\, payment = \$280,000 \\times0.05

STEP 5

Calculate the down payment amount.
Down payment=$280,000times0.05=$14,000Down\, payment = \$280,000 \\times0.05 = \$14,000

STEP 6

Now that we have the down payment amount, we can find the loan amount. This is the purchase price minus the down payment.
Loan amount=Purchase price−Down paymentLoan\, amount = Purchase\, price - Down\, payment

STEP 7

Plug in the values for the purchase price and the down payment to calculate the loan amount.
Loan amount=$280,000−$14,000Loan\, amount = \$280,000 - \$14,000

STEP 8

Calculate the loan amount.
Loan amount=$280,000−$14,000=$266,000Loan\, amount = \$280,000 - \$14,000 = \$266,000

STEP 9

Now we need to calculate the closing costs. The closing costs include a credit report fee, loan origination fee, attorney and notary fee, documentation stamp fee, and processing fee. The loan origination fee and the documentation stamp fee are percentages of the loan amount.
Closing costs=Credit report fee+Loan origination fee+Attorney and notary fee+Documentation stamp fee+Processing feeClosing\, costs = Credit\, report\, fee + Loan\, origination\, fee + Attorney\, and\, notary\, fee + Documentation\, stamp\, fee + Processing\, fee

STEP 10

Calculate the loan origination fee and the documentation stamp fee by multiplying the loan amount by their respective rates.
Loan origination fee=Loan amounttimesLoan origination fee rateLoan\, origination\, fee = Loan\, amount \\times Loan\, origination\, fee\, rateDocumentation stamp fee=Loan amounttimesDocumentation stamp fee rateDocumentation\, stamp\, fee = Loan\, amount \\times Documentation\, stamp\, fee\, rate

STEP 11

Plug in the values for the loan amount, loan origination fee rate, and documentation stamp fee rate to calculate the loan origination fee and the documentation stamp fee.
Loan origination fee=$266,000times%Loan\, origination\, fee = \$266,000 \\times\%Documentation stamp fee=$266,000times0.50%Documentation\, stamp\, fee = \$266,000 \\times0.50\%

STEP 12

Convert the percentages to decimal values.
%=0.01\% =0.010.50%=0.0050.50\% =0.005Loan origination fee=$266,000times0.01Loan\, origination\, fee = \$266,000 \\times0.01Documentation stamp fee=$266,000times0.005Documentation\, stamp\, fee = \$266,000 \\times0.005

STEP 13

Calculate the loan origination fee and the documentation stamp fee.
Loan origination fee=$266,000times0.01=$2,660Loan\, origination\, fee = \$266,000 \\times0.01 = \$2,660Documentation stamp fee=$266,000times0.005=$,330Documentation\, stamp\, fee = \$266,000 \\times0.005 = \$,330

STEP 14

Now that we have all the closing costs, we can add them up to find the total closing costs.
Total closing costs=$100+$2,660+$500+$,330+$600Total\, closing\, costs = \$100 + \$2,660 + \$500 + \$,330 + \$600

STEP 15

Calculate the total closing costs.
Total closing costs=$100+$2,660+$500+$,330+$600=$5,190Total\, closing\, costs = \$100 + \$2,660 + \$500 + \$,330 + \$600 = \$5,190

STEP 16

Now that we have the total closing costs, we can find the total mortgage amount. This is the loan amount plus the closing costs.
Total mortgage=Loan amount+Total closing costsTotal\, mortgage = Loan\, amount + Total\, closing\, costs

STEP 17

Plug in the values for the loan amount and the total closing costs to calculate the total mortgage.
Total mortgage=$266,000+$5,190Total\, mortgage = \$266,000 + \$5,190

STEP 18

Calculate the total mortgage amount.
Total mortgage=$266,000+$5,190=$271,190Total\, mortgage = \$266,000 + \$5,190 = \$271,190The total mortgage for a 280,000purchase,a5280,000 purchase, a5% down payment, and the closing costs shown in the table is 271,190.

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