Answer: $106,250
Explanation: Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05).
He needs $106,250 to close ([$125,000 - $50,000] + $31,250).
The amount for home that should be bought to the closing by Nico is $106,250.
Computation:
Given,
Purchase amount =$625,000
Rate of money deposit =8%
Rate of closing cost =5%
First, the down payment is computed.
For the conventional loans there is 20% of down payment for avoiding private mortgage insurance. So, it is:
[tex]\begin{aligned}\text{Down Payment}&=\text{Purchase Amount}\times\text{Rate of Down Payment}\\&=\$625,000\times20\%\\&=\$125,000\end{aligned}[/tex]
Now, the closing cost and money deposited will be computed based upon the given percentages.
[tex]\begin{aligned}\text{Money Deposit}&=\text{Purchase Amount}\times\text{Rate of Money Deposit}\\&=\$625,000\times8\%\\&=\$50,000\end{aligned}[/tex]
[tex]\begin{aligned}\text{Closing Cost}&=\text{Purchase Amount}\times\text{Rate of Closing Cost}\\&=\$625,000\times5\%\\&=\$31,250\end{aligned}[/tex]
The computation of the final amount that is bought to the closing is as follows:
[tex]\begin{aligned}\text{Closing Amount}&=\text{Down Payment\;-\;Money Deposit\;+\; Closing Cost}\\&=\$125,000-\$50,000+\$31,250\\&=\$106,250\end{aligned}[/tex]
Thus, Nico should bring $106,250 for closing his account.
To know more about private mortgage insurance, refer to the link:
https://brainly.com/question/989296
