6.4 Purchasing a Home Bell Ringer

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What is a down payment in home purchasing?

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A down payment is the initial upfront payment made when purchasing a home, typically expressed as a percentage of the purchase price.

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How do you calculate closing costs?

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Closing costs are typically calculated as a percentage of the home's purchase price, usually ranging from 2% to 6%.

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CCSS.7.RP.A.3

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What is prepaid interest in the context of home buying?

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Prepaid interest is the interest that is paid in advance for the period between the closing date and the end of the month.

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How do you calculate the amount borrowed after a down payment?

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Amount Borrowed = Purchase Price - Down Payment.

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CCSS.5.OA.A.1

CCSS.5.OA.A.2

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What is the formula to calculate prepaid interest?

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Prepaid Interest = (Loan Amount x Interest Rate x Number of Days) / 360.

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CCSS.7.RP.A.3

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If a home costs $300,000 and the down payment is 12%, how much is the down payment?

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Down Payment = $300,000 x 0.12 = $36,000.

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CCSS.6.RP.A.3C

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What is the range of closing costs for a $300,000 home with 2% to 6% closing costs?

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Closing Costs Range = $300,000 x 0.02 to $300,000 x 0.06 = $6,000 to $18,000.

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CCSS.5.NF.B.6

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If Jason is closing on a $430,000 home with a 13% down payment, how much is his down payment?

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Down Payment = $430,000 x 0.13 = $55,900.

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CCSS.6.RP.A.3C

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What is the significance of the interest rate in a mortgage?

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The interest rate determines the cost of borrowing money for the mortgage and affects monthly payments.

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How do you determine the total amount due at closing?

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Total Amount Due at Closing = Down Payment + Closing Costs + Prepaid Interest.

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CCSS.7.RP.A.3