Maya is buying a house for \( \$ 130,000 \). She plans to make a \( 18 \% \) down payment. Closing costs include \( \$ 550 \) for 6 months of homeowners insurance, \( \$ 850 \) for 6 months of property tax, \( \$ 125 \) for the title fee, and \( \$ 400 \) in transaction fees. Maya also agreed to pay two points in exchange for a \( 0.5 \% \) reduction in interest rate. Determine the amount of money Maya will be expected to pay at closing. Round your answer to the nearest cent. Answer

To determine the total amount Maya will need to pay at closing, we'll break down the costs into two main components: 1. **Down Payment** 2. **Closing Costs** ### 1. Down Payment Maya is making an **18%** down payment on a house priced at **\$130,000**. \[ \text{Down Payment} = 0.18 \times 130,000 = \$23,400 \] ### 2. Closing Costs The closing costs include several items: - **Homeowners Insurance (6 months):** \$550 - **Property Tax (6 months):** \$850 - **Title Fee:** \$125 - **Transaction Fees:** \$400 - **Points:** Maya agreed to pay **two points** for a **0.5%** interest rate reduction. **Calculating Points:** Points are typically a percentage of the loan amount. First, determine the loan amount: \[ \text{Loan Amount} = \text{House Price} - \text{Down Payment} = 130,000 - 23,400 = \$106,600 \] \[ \text{Cost of Two Points} = 2\% \times 106,600 = 0.02 \times 106,600 = \$2,132 \] **Total Closing Costs:** \[ \text{Total Closing Costs} = 550 + 850 + 125 + 400 + 2,132 = \$4,057 \] ### **Total Amount at Closing** \[ \text{Total Amount} = \text{Down Payment} + \text{Closing Costs} = 23,400 + 4,057 = \$27,457.00 \] **Rounded to the nearest cent:** \[ \boxed{\$27,\!457.00} \]