Finance
Discount points paid by a buyer at closing on an Arizona home loan have the effect of:
AIncreasing the loan amount
BReducing the loan's interest rate (buying down the rate)✓ Correct
CExtending the loan term
DEliminating the need for private mortgage insurance
Explanation
Each discount point equals 1% of the loan amount. Paying points 'buys down' the interest rate, lowering the monthly payment in exchange for an upfront cost at closing.
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