Answer:
Del is expected to prepaid to pay $535.62 in prepaid interest at the closing.
Explanation:
The down payment of 15% is $250000*15%=$37500
The balance of mortgage net of down payment=$250000-$37500
=$212500
Interest yearly=$212500*5.75%=$12,218.75
A year interest divided by 365days give one day interest.
A day interest=$12218.75/365=$33.48
Total interest to pay at closing=16days*$33.48
=$535.62
The number of days was 16 because July has 31days and deal was closed on 15th,hence 31 minus 15 gives 16.
Del is expected to pay in prepaid interest of $535.62 at the closing.
A mortgage is an agreement between the lender and the borrower, that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest.
The down payment of 15% is $250,000 * 15% = $37,500
Balance of mortgage net of down payment
= $250,000 - $37,500
= $212,500
Interest yearly
= $212500 * 5.75%
= $12,218.75
A year interest divided by 365days give one day interest.
A day interest
= $12218.75 / 365
= $33.48
Total interest to pay at closing
= 16days * $33.48
= $535.62
Hence, Del is expected to pay in prepaid interest of $535.62 at the closing.
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