A buyer looks to purchase a home for $160,000 with a 15% down payment and lender charges 2 points. How much money is needed upfront?

To determine the upfront money needed for the purchase of the home, you first calculate the down payment and then the points charged by the lender.

The home price is $160,000, and the buyer is making a 15% down payment. To find the down payment amount, you would calculate 15% of $160,000:

15% of $160,000 = 0.15 * $160,000 = $24,000.

Next, the lender is charging 2 points on the loan. Points are calculated based on the total loan amount, which is the purchase price minus the down payment. The down payment of $24,000 is subtracted from the home price:

Loan amount = $160,000 - $24,000 = $136,000.

To find the cost of the points, you multiply the loan amount by 2% (or 0.02) since each point is equal to 1% of the loan amount:

Cost of points = 2% of $136,000 = 0.02 * $136,000 = $2,720.

Finally, to find the total amount needed upfront, you add the down payment to the cost of the points:

Total upfront costs