Q:

# A lender estimates the closing costs on a home loan of $50,000 as listed below. Closing Cost Charge Loan origination$200 Title insurance $530 Attorney’s fees$600 Appraisal $265 Inspection$575 Recording fees $130 Escrow$800 If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not? a. Yes, because the lender esitmated 3.08% of the home loan in closing costs which falls between 3 - 5%. b. Yes, because the lender estimated 4.6% of the home loan in closing costs which does not fall between 3 - 5%. c. No, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%. d. No, because the lender estimated 17.7% of the home loan in closing costs which does fall between

Accepted Solution

A:
Answer:c.No, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%Step-by-step explanation:Summation of the cost of loan =200+530+600+265+575+130+800=3100Now percentage of the estimate=(3100/50000)*100%=6.2%