a lender estimates the closing costs on a home loan of $50,000 as listed below.\n| closing cost | charge…

a lender estimates the closing costs on a home loan of $50,000 as listed below.\n| closing cost | charge |\n|--|--| \n| loan origination | $200 |\n| title insurance | $530 |\n| attorneys fees | $600 |\n| appraisal | $265 |\n| inspection | $575 |\n| recording fees | $130 |\n| escrow | $800 |\nif the lenders good faith estimates are accurate, are they a reasonable amount for closing costs? why or why not?\n a. yes, because the lender estimated 3.08% of the home loan in closing costs which falls between 3 - 5%.\n b. yes, because the lender estimated 4.6% of the home loan in closing costs which does not fall between 3 - 5%.\n c. no, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%.

a lender estimates the closing costs on a home loan of $50,000 as listed below.\n| closing cost | charge |\n|--|--| \n| loan origination | $200 |\n| title insurance | $530 |\n| attorneys fees | $600 |\n| appraisal | $265 |\n| inspection | $575 |\n| recording fees | $130 |\n| escrow | $800 |\nif the lenders good faith estimates are accurate, are they a reasonable amount for closing costs? why or why not?\n a. yes, because the lender estimated 3.08% of the home loan in closing costs which falls between 3 - 5%.\n b. yes, because the lender estimated 4.6% of the home loan in closing costs which does not fall between 3 - 5%.\n c. no, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%.

Answer

Explanation:

Step1: Calculate total closing costs

$200 + 530+600 + 265+575+130+800=3100$

Step2: Calculate percentage of closing costs to loan amount

$\frac{3100}{50000}\times100 = 6.2%$

Step3: Analyze if it's reasonable

Typical closing - cost range is 3 - 5%. Since 6.2% is outside this range, it's not reasonable.

Answer:

c. No, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%.