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QuizMultiple Choice

Other Costs of Buying a Home

Question 1 • 26-27 Ignite Technical Math-Financial Math - MA2007

The following closing costs were paid on a home loan.Closing CostChargeLoan origination$320Title insurance$473Attorney’s fees$915Appraisal$415Recording fees$103Escrow$1,318If the closing costs were 5% of the loan amount, how much was the loan amount?

Answer
A
$62,580
B
$70,880
C
$74,424
D
$177,200

Explanation

Add the closing costs: $320 + $473 + $915 + $415 + $103 + $1,318 = $3,544. Since this is 5% of the loan amount, divide by 0.05: $3,544 ÷ 0.05 = $70,880. The loan amount is $70,880, choice B.

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