Sharon Fox decided to buy a home in Marblehead, Massachusetts, for $266,000. Her

Question

Sharon Fox decided to buy a home in Marblehead, Massachusetts, for $266,000. Her bank requires a 20% down payment. Sue Willis, an attorney, has notified Sharon that besides the 20% down payment there will be the following additional costs:

In addition, there will be a transfer tax of 2% of the purchase price and a loan origination fee of 2% of the mortgage amount. Assume a 30-year mortgage at a rate of 10.5%.

What is the initial amount of cash Sharon will need? (Do not round intermediate calculations. Round your answer to the nearest cent.)

What is her monthly payment? (Do not round intermediate calculations.Round your answer to the nearest cent.)

What is the total cost of interest over the life of the mortgage?(Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.)

Sharon Fox decided to buy a home in Marblehead, Massachusetts, for $266,000. Her bank requires a 20% down payment. Sue Willis, an attorney, has notified Sharon that besides the 20% down payment there will be the following additional costs:

Explanation / Answer

a)

b) To calculate monthlty payment we will use the below formula:

c)

Payment Sharon needs initially Downpayment $       53,200 Recording of deed $             21 A credit and appraisal report $           146 Preparation of appropriate documents $             39 Transfer tax on Purchase price 2% of 266000 $         5,320 Loan origination fee 2% of mortgage amount 2% x 212800 $         4,256 Total Paymen sharon needs initially $       62,982

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