Question

You are purchasing a house 12 years from now. The estimated purchase price is $171,600.00. You want to make a 20% down payment. You are trying to determine how much to save per month to reach your goal. If closing costs are 8.7%, how much additional money do you need to save per month to cover the additional expense?

Answer 1

need 34,320 for 20% down divide by 12 years and then by 12 months = 238.33 per month (assume no interest on savings, rounding occurs

Answer 2

If the closing cost are 8.7%, the additional money to be saved per month to cover the additional expense is $83.

What is closing cost?

"Closing costs are the expenses over and above the property's price that buyers and sellers usually incur to complete a real estate transaction."

What is estimated cost?

"Estimated cost is the projection of the amount of costs that will be incurred to build a product or construct something."

Estimated purchase price = $171600

Down payment = 20%

Time = 12 years

Closing costs percentage = 8.7%

After down payment, estimated cost = 171600 - (20% of 171600) = $137280

Time = 12 × 12 = 144 months

Closing cost = 8.7% of $137280 = $11943.36 ≈ $11943

Monthly installment of closing cost = $11943 ÷ 144 = 82.9375 ≈ $83

Hence, the additional money to be saved is $83

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