On a $150,000 purchase with 80% loan-to-value and 3 points, how much does the buyer need to bring to closing?

• A. 30,000
• B. 3,600
• C. 33,600
• D. 120,000

Answer: (C)

At closing, the buyer brings the amount financed minus the loan plus any prepaid financing charges. With an 80% loan-to-value on a $150,000 purchase, the loan amount is 0.80 × 150,000 = 120,000. The down payment is the remainder: 150,000 − 120,000 = 30,000. Points are prepaid interest: 3 points equal 3% of the loan amount, so 0.03 × 120,000 = 3,600. Add the down payment and the points: 30,000 + 3,600 = 33,600. Therefore, the buyer would need to bring 33,600 to closing in this scenario. (Note: other closing costs may apply, but they’re not included in this calculation.)