Finance
What does 'discount points' mean when obtaining a Florida mortgage?
AThe lender reduces the property's appraised value
BPrepaid interest paid at closing to permanently reduce the mortgage interest rate✓ Correct
CFees paid to a mortgage broker for finding the loan
DPoints subtracted from the credit score during underwriting
Explanation
Discount points are prepaid interest paid to the lender at closing to 'buy down' (reduce) the interest rate on the mortgage. One point equals 1% of the loan amount. Paying points reduces the monthly payment over the loan term.
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