How much cash does a borrower need to bring to closing if the purchase price is $157,000 and the buyer's loan covers 75% of the LTV, with 4% seller contribution and closing costs of $5,250?

To determine how much cash the borrower needs to bring to closing, we start by calculating the necessary components based on the information provided.

First, calculate the loan amount based on the loan-to-value (LTV) ratio. If the purchase price is $157,000 and the loan covers 75% of this amount, the loan amount can be calculated as follows:

Loan Amount = Purchase Price × LTV

Loan Amount = $157,000 × 0.75 = $117,750

Next, subtract the seller contribution from the closing costs. The seller is contributing 4% of the purchase price, which can be calculated as follows:

Seller Contribution = Purchase Price × Seller Contribution Percentage

Seller Contribution = $157,000 × 0.04 = $6,280

The effective closing costs that the borrower has to pay out of pocket are then the total closing costs minus the seller contribution:

Effective Closing Costs = Total Closing Costs - Seller Contribution

Effective Closing Costs = $5,250 - $6,280 = -$1,030

Since the seller contribution exceeds the closing costs, the borrower does not need to pay anything additional for closing in this scenario. Instead, they could potentially receive a credit from the seller toward other