What does 'points' mean in the context of Alaska real estate financing?
Why Prepaid interest charged at closing, each point equaling 1% of the loan amount Is Correct
Answer B: Prepaid interest charged at closing, each point equaling 1% of the loan amount
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related Alaska Questions
- A buyer in Alaska purchases a $420,000 home, making a 15% down payment. How much private mortgage insurance is required annually if the PMI rate is 0.75% of the loan amount?Real Estate Math
- The discount points paid by a borrower at closing primarily serve to:Finance
- A point paid at closing on a mortgage equals:Finance
- A buyer pays 2 discount points on a $350,000 loan. How much does the buyer pay in discount points at closing?Finance
- An Alaska property sells for $350,000. The buyer makes a 20% down payment and finances the rest. What is the loan amount?Finance
- An Alaska property sold for $525,000. The buyer paid 3 points on a $420,000 loan. How much did the buyer pay in points?Real Estate Math
- A buyer purchases a $260,000 Alaska home with an FHA loan at 3.5% down. The FHA upfront MIP is 1.75% of the loan amount. What is the upfront MIP?Real Estate Math
- An Alaska investor borrows $250,000 at 7% interest for 6 months on a short-term bridge loan. Interest only is paid. Total interest paid is:Real Estate Math
Key Terms to Know
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
Study This Topic
Practice More Alaska Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →