Sharon Fox decided to buy a home in Marblehead, Massachusetts, for $275,000. Her bank requires a 30% down payment. Sue Willis, an attorney, has notified Sharon that besides the 30% down payment there will be the following additional costs:
|
Recording of the deed |
$ 30.00 |
|
A credit and appraisal report |
155.00 |
|
Preparation of appropriate documents |
48.00 |
A transfer tax of 1.8% of the purchase price and a loan origination fee of 2.5% of the mortgage amount
Assume a 30 year mortgage at a rate of 10%.
a. What is the initial amount of cash Sharon will need?
b. What is her monthly payment?
c. What is the total cost of interest over the life of the mortgage?