The buyer has agreed to pay \( \$ 175,000 \) in sales price, 2.5 loan discount points and a 1 percent origination fee. If the buyer receives a 90 percent loan-to-value ratio, how much will the buyer owe at closing for points and the origination fee?

To calculate the amount the buyer will owe at closing for points and the origination fee, we first need to determine the loan amount based on the sales price and the loan-to-value ratio. The buyer is paying \( \$ 175,000 \) with a \( 90\% \) loan-to-value ratio, which means the loan amount is: \[ \text{Loan Amount} = \text{Sales Price} \times \text{LTV} = \$ 175,000 \times 0.90 = \$ 157,500 \] Now, we calculate the loan discount points and the origination fee. **Loan Discount Points:** The buyer is paying \( 2.5\% \) in loan discount points, which is calculated as: \[ \text{Loan Discount Points} = \text{Loan Amount} \times \text{Points} = \$ 157,500 \times 0.025 = \$ 3,937.50 \] **Origination Fee:** The origination fee is \( 1\% \) of the loan amount, calculated as: \[ \text{Origination Fee} = \text{Loan Amount} \times \text{Origination Fee} = \$ 157,500 \times 0.01 = \$ 1,575 \] Finally, we combine those two costs to find the total amount the buyer will owe at closing: \[ \text{Total Due at Closing} = \text{Loan Discount Points} + \text{Origination Fee} = \$ 3,937.50 + \$ 1,575 = \$ 5,512.50 \] So, the buyer will owe \( \$ 5,512.50 \) at closing for points and the origination fee.