Could you break it down to details (step by step)

Question

If the savings and loan gives you a 90% loan on a house valued at $288,500, how much additional cash must you produce as a down payment if you have already paid $14,500 in earnest money?

Answer 1

The sum of the loan, the down payment and the earnest money is the cost of the house.  

 

90% loan on 288500 = 0.90*288500 = $259650 

 

So down payment = House cost - loan - earnest money

                           = 288500 - 259650 - 14500 = 28850 - 14500 = $14350 

 

Another way to look at the problem is that if you are getting a loan for 90% of the value then you have to pay the remaining 10%.  10% of 288500 = 0.10*288500 = $28850.  You have already paid 14500 in earnest money, so the additional cash you need as a down payment is 28850 - 14500 = $14350