Nationwide Mortgage Licensing System (NMLS) Practice Exam

If a buyer has made an earnest money payment of $5,000 and option money of $2,000 on a property with a sale price of $160,000, how much additional money will the buyer need to provide toward the down payment at closing if the required down payment is 20%?

1. $32,000

2. $27,000

3. $30,000

4. $25,000

The correct answer is: $25,000

To determine how much additional money the buyer will need to provide toward the down payment at closing, you first need to calculate the total required down payment based on the sale price of the property. Given that the sale price is $160,000 and the required down payment is 20%, the calculation is as follows: 1. Calculate the required down payment: Down Payment = Sale Price x Down Payment Percentage = $160,000 x 0.20 = $32,000 Next, consider the earnest money payment and option money that the buyer has already made. The total of these two amounts is: Earnest Money + Option Money = $5,000 + $2,000 = $7,000 Now, subtract the total amount already paid from the required down payment to find out how much more the buyer needs to contribute at closing: 2. Additional Money Required: Additional Money = Required Down Payment - Total Paid = $32,000 - $7,000 = $25,000 Thus, the amount of additional money the buyer will need to provide at closing towards the down payment is $25,000. This aligns with the correct option, which