Finance
What does 'points' mean in mortgage financing?
AThe number of lenders who reviewed the loan application
BPrepaid interest; one point equals 1% of the loan amount✓ Correct
CThe borrower's credit score
DThe loan-to-value percentage
Explanation
One mortgage point equals 1% of the loan amount. Points can be 'discount points' (prepaid interest to lower the interest rate) or origination points (lender fees). Paying points upfront reduces the monthly payment but increases initial costs.
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