Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing?

Question

Sergio Mcmillan

Business

5 November, 19:01

Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing?

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Answers (1)

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Skye · Answer 1

Answer: $106,250

Explanation: Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x. 08). Closing costs are $31,250 ($625,000 x. 05).

He needs $106,250 to close ([$125,000 - $50,000] + $31,250).