Asked by giggly puffs on May 15, 2024
Verified
Jamal has been approved for a $125,000,30-year mortgage with an APR of 5.3%.He made a 10% down payment and is closing on April 5th.How much should he expect to pay in prepaid interest at closing?
APR
The Annual Percentage Rate, which reflects the cost of borrowing on a yearly basis and includes interest and other charges.
Mortgage
A loan secured by real estate property, commonly used to purchase a home.
Prepaid Interest
Interest starts accruing (building) at the beginning of each month and continues throughout the month; prepaid interest at the closing is the amount of mortgage interest due to cover the time from the closing date to when the first mortgage payment is due.
- Learn the foundational aspects of finance arithmetic, specifically involving percentages and proportion computations.
- Grasp the financial parameters involved in real estate investment, including equity, mortgage mechanics, and interest calculations.
Verified Answer
Learning Objectives
- Learn the foundational aspects of finance arithmetic, specifically involving percentages and proportion computations.
- Grasp the financial parameters involved in real estate investment, including equity, mortgage mechanics, and interest calculations.
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