Finance
What does 'points' mean in mortgage financing?
AThe lender's credit score requirement
BPrepaid interest — each point equals 1% of the loan amount✓ Correct
CThe number of years on the loan
DThe lender's origination fee as a flat dollar amount
Explanation
Mortgage points (discount points) are prepaid interest paid upfront to lower the interest rate. One point = 1% of the loan amount. Paying points makes sense if you plan to keep the loan long-term.
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