Question

a building was purchased for $850 000 with 10 down and the lender charged the buyer 2 discount points. How much cash did the buyer need to come up with at closing a loan for the balance

Answer 1

The cash that the buyer need to come up with at closing a loan for the balance is: $833,000.

Cash amount

Using this formula

Cash amount=Cost of building-(Cost of building × Discount point)

Let plug in the formula

Cash amount=$850,000-($850,000×2%)

Cash amount=$850,000-$17,000

Cash amount=$833,000

Therefore the cash that the buyer need to come up with at closing a loan for the balance is: $833,000.

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