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Sagot :
The lender’s good faith estimate is that he made a poor estimate; it was off by more than 0.5% of the actual closing costs.
What is closing cost?
All the expenduture and charges charged by a lander and other parties is called the closing cost.
A lender estimates the closing costs on a home loan will be 3.75% of the loan amount of $120,000. Thus, the estimate closing cost is,
[tex]C_{ec}=\dfrac{3.75}{100}\times120000\\C_{ec}=4500[/tex]
The actual closing costs are listed below.
- Loan origination $300
- Title insurance $600
- Attorney’s fees $1,250
- Appraisal $550
- Inspection $525
- Recording fees $125
- Escrow $2,000.
The total annual cost is,
[tex]C= $300 +$600 +$1,250 +$550 +$525 +$125 +$2,000\\C=4800[/tex]
Total annual cost is $300 more than the estimate closing cost. In the percentage form,
[tex]p=\dfrac{4800-4500}{4500}\times100\\p=6.66\%[/tex]
Thus, the lender’s good faith estimate is that he made a poor estimate; it was off by more than 0.5% of the actual closing costs.
Learn more about the closing cost here;
https://brainly.com/question/20108287
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