Response to the following problem:
Sharon Fox decided to buy a home in Marblehead, Massachusetts, for $275,000. Her bank requires a 30% down payment. Sue Willis, an attorney, has notified Sharon that besides the 30% down payment there will be the following additional costs:
Recording of the deed $ 30.00
A credit and appraisal report 155.00
Preparation of appropriate documents 48.00
A transfer tax of 1.8% of the purchase price and a loan origination fee of 2.5% of the mortgage amount
Assume a 30-year mortgage at a rate of 10%.
a. What is the initial amount of cash Sharon will need?
b. What is her monthly payment?
c. What is the total cost of interest over the life of the mortgage?