6.1-6.2

Financial Math

Down Payment

Most people make a cash down payment, or a percentage of the total cost of the house paid at the time of purchase, to their lender.

- some lenders require no down payment; others ask for as much as 30%. the more money you can put as a down payment, the less you'll need to borrow.

Closing Costs

Fees and expenses paid to complete the transfer of ownership of a home. closing costs may range from 3% to 6% of the purchase price of the home. Typical closing costs include legal fees, recording fees, title insurance, loan application fees, appraisal and inspection fees.

Principal

The money borrowed is called the principal. Interest must be paid on the mortgage loan.

Mortgage laon

Te balance of the purchase price (after the down payment) is usually borrowed through a mortgage loan taken with a bank or other lender.