Finance
What is a 'point' in mortgage financing?
AOne dollar of mortgage principal
BOne percent of the loan amount paid upfront to reduce the interest rate✓ Correct
COne year of mortgage payments
DA penalty charge for early payoff
Explanation
One mortgage point equals 1% of the loan amount. Discount points are paid upfront at closing to reduce (buy down) the interest rate. Each point typically reduces the rate by about 0.25%.
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