Finance
Discount points paid at closing are used to:
ACover the lender's origination costs
BBuy down (reduce) the interest rate on the loan✓ Correct
CPay the title insurance premium
DFund the escrow account for taxes and insurance
Explanation
Each discount point equals 1% of the loan amount and is paid upfront to reduce (buy down) the interest rate. More points = lower rate, but higher upfront cost.
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