Finance
A Colorado buyer asks what 'discount points' are. Each discount point equals:
A0.5% of the loan amount paid to reduce the rate by 0.5%
B1% of the loan amount, paid to 'buy down' the interest rate✓ Correct
C1% of the purchase price paid to the seller
DA flat fee regardless of loan amount
Explanation
One discount point equals 1% of the loan amount and is paid upfront to the lender to reduce the mortgage interest rate. The rate reduction per point varies by lender and market conditions.
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