Henry will purchase an insurance policy in this transaction for how much?

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Multiple Choice

Henry will purchase an insurance policy in this transaction for how much?

Explanation:
In a real estate deal, homeowners insurance is typically treated as a prepaid item. The buyer must have an active policy on the day of closing, and the Closing Disclosure shows the first year’s premium paid upfront to start the policy. So the amount Henry will pay for the insurance in this transaction is the annual premium for that policy. If the monthly premium is $60, the yearly premium is $720, which is why the correct amount is 720. The other numbers would only fit if the scenario involved a partial year, a different monthly rate, or a monthly payment handled through escrow rather than paid at closing.

In a real estate deal, homeowners insurance is typically treated as a prepaid item. The buyer must have an active policy on the day of closing, and the Closing Disclosure shows the first year’s premium paid upfront to start the policy. So the amount Henry will pay for the insurance in this transaction is the annual premium for that policy. If the monthly premium is $60, the yearly premium is $720, which is why the correct amount is 720. The other numbers would only fit if the scenario involved a partial year, a different monthly rate, or a monthly payment handled through escrow rather than paid at closing.

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