How much money does a buyer need to close a transaction on a $150,000 property with an 80% loan-to-value ratio and 3 points?

To determine how much money a buyer needs to close a transaction on a $150,000 property with an 80% loan-to-value ratio and 3 points, we first calculate the down payment and the closing costs associated with the points.

1. Calculate the Loan Amount: With an 80% loan-to-value ratio, the buyer is financing 80% of the property's value. The loan amount is: [ \text{Loan Amount} = 150,000 \times 0.80 = 120,000 ]

2. Calculate the Down Payment: The down payment is the remaining 20% of the property's value, which is: [ \text{Down Payment} = 150,000 \times 0.20 = 30,000 ]

3. Calculate the Points: Points are a form of prepaid interest. In this case, the buyer is paying 3 points on the loan amount. One point equals 1% of the loan, so: [ \text{Points Cost} = 120,000 \times 0.03 = 3,600 ]