What is 'points' in the context of a Delaware mortgage?
Why Upfront fees paid to a lender, with one point equaling 1% of the loan amount, often used to buy down the interest rate Is Correct
Answer B: Upfront fees paid to a lender, with one point equaling 1% of the loan amount, often used to buy down the interest rate
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
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Key Terms to Know
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
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