Housing Affordability Module 2.1.

I believe there is a mistake in this module.

Knowledge Check 2 on page 10 reads:

“If Rebecca’s client, Ben, obtains a mortgage for $90,000, which is the most likely amount that he will pay for closing costs?

A. $1,000
B. $3,500
C. $7,000
D. $10,000”

The Knowledge Check Answer Key on page 29 reads:

“2. (B) $3,500

Closing costs average between 3 to 4% of the home purchase price.

Incorrect answers: (A) $1,000 (C) $7,000 (D) $10,000”

I believe the question and answer are a mistake. The question should be based on the sales price, not the loan amount, as taught on page 9 of the module which says:

“Closing costs average between 3 to 4% of the home purchase price but are based on a variety of factors and may be higher or lower. A typical loan for a $200,000 home would have closing costs ranging from $6,000 to $8,000.”

So actually, the only way to accurately answer the Knowledge Check question is to know how much Ben put down to arrive at the sales price to calculate the 3 to 4% average closing cost.

Although answer B of $3,500 is the closest to 3-4% of the amount given of $90,000, the $90,000 is the loan amount, not the sales price.

Please correct me if I’m wrong but I think this mistake should be fixed in the module.

Thank you.