To solve this problem, we need to determine Kari's total closing costs based on the given information.

Step-by-Step Calculation

1. Calculate the Down Payment: $\text{Down Payment} = 25\% \times 260,000 = 0.25 \times 260,000 = 65,000$

2. Calculate the Amount Financed: $\text{Amount Financed} = 260,000 - 65,000 = 195,000$

3. Discount Points Cost: The cost of each discount point is 1% of the amount financed. Since Kari is paying for 3 discount points: $\text{Discount Points Cost} = 3\% \times 195,000 = 0.03 \times 195,000 = 5,850$

4. Title Insurance Premium: The title insurance premium is also calculated as 1% of the amount financed: $\text{Title Insurance Premium} = 1\% \times 195,000 = 0.01 \times 195,000 = 1,950$

5. Other Closing Costs: The additional closing costs are given directly:

   • Credit Report: $90
   • Appraisal Fee: $110
   • Title Search: $300
   • Attorney’s Fees: $500

6. Total Closing Costs Calculation: Add all the individual costs together: $\text{Total Closing Costs} = 5,850 + 1,950 + 90 + 110 + 300 + 500 = 8,800$

Answer

Kari's total closing costs are $8,800.

Would you like further explanation or have any questions about this solution?

Here are some related questions to explore:

1. How would the closing costs change if the discount points were reduced to 2 points?
2. What would the amount financed be if Kari increased her down payment to 30%?
3. How would a 10% mortgage interest rate impact the monthly payment compared to the current 8% rate?
4. What additional costs might Kari face if she had to pay private mortgage insurance (PMI)?
5. How would the closing costs change if the title insurance premium increased to 2%?

Tip: When calculating financial problems, always confirm that you are using the correct percentage rates for each component.