Question

MR GREEN WISHES TO PURCHASE A HOME SELLING FOR $125,000. THE BANKS REQUIRES A 20% DOWN PAYMENT AND A PAYMENT OF 2 POINTS AT CLOSING WHAT IS THE COST OF TWO POINTS ON THE MORGAGE?

Answer 1

Given: The following

$\begin{gathered} Selling-price=125000dollars \\ Down-payment=20\% \end{gathered}$

To Determine: The cost of two points at closing

Solution

Let us first calculate the down payment

$\begin{gathered} Down-payment=20\%\times125000 \\ =0.2\times125000 \\ =25000dollars \end{gathered}$