Question

If title insurance is priced at $3.50 per $1,000 borrowed, and the house's price is $165,000 with the buyers putting 20% down, what is the cost of title insurance?

a) $1,155
b) $350
c) $5,250
d) $1,680

Answer 1

The cost of title insurance for the house, after a 20% down payment on a $165,000 home, would be $462, calculated by determining the amount borrowed and then applying the title insurance rate.

Step-by-step explanation:

To calculate the cost of title insurance for a house purchase, we use the price of the house, the down payment percentage, and the rate of the title insurance. In this case, the house's price is $165,000, and the buyers are putting 20% down. This means they are not borrowing the full amount but rather the amount minus the down payment.

First, let's find out how much they will borrow:

• Down payment: 20% of $165,000 = 0.20 * $165,000 = $33,000
• Amount borrowed: $165,000 - $33,000 = $132,000

Now we calculate the title insurance cost:

Title Insurance rate: $3.50 per $1,000 borrowed

Number of $1,000 increments in $132,000: $132,000 / $1,000 = 132

Title Insurance cost: 132 * $3.50 = $462

The cost of title insurance would be $462, however, none of the options matches this result. It might be necessary to double-check the options or the calculation details provided in the question to proceed accurately.