If a property has a purchase price of $203,000 and an appraised value of $200,000, with closing costs of $5,000 and a 1.75% upfront mortgage insurance payment, what is the cash required for this purchase?

To determine the cash required for the purchase of the property, it’s essential to break down the components involved in the calculation:

1. Purchase Price: The price at which the property is being bought is $203,000.

2. Closing Costs: These are additional expenses typically associated with the transaction, which in this case amount to $5,000.

3. Mortgage Insurance Upfront Payment: The property requires mortgage insurance calculated at 1.75% of the loan amount. The loan amount is often the lesser of the purchase price or the appraised value. Since the appraised value is $200,000, this will be the basis for calculating the mortgage insurance.

• First, we calculate the upfront mortgage insurance payment: [ 1.75% \text{ of } $200,000 = 0.0175 \times 200,000 = $3,500 ]

4. Total Cash Required: To find the total cash required, we add the down payment, closing costs, and mortgage insurance. Assuming no specific down payment percentage is provided, if we consider a scenario where a buyer needs to put down a certain percentage, and here