Question

A buyer paid $7,000 in earnest money and acquired a mortgage of 65% of the $48,500 sales price. How much cash did the buyer have to bring to closing?

Answer 1

Answer:

$9,975

Explanation:

For computing the closing cash, first, we have to do the following calculations

Since the sale price is $48,500 out of which only 65% loan is taken

So, the loan value would be

= $48,500 × 65%

= $31,525

So, the remaining amount would be

= $48,500 -  $31,525

= $16,975

And, the paid amount is $7,000

SO, the closing cash balance would be

= $16,975 -  $7,000

= $9,975