Finance
A buyer who pays 'discount points' on a mortgage is essentially:
APaying the lender's underwriting fees
BPrepaying interest to 'buy down' the mortgage interest rate✓ Correct
CPaying for title insurance in advance
DPaying a penalty for low credit score
Explanation
Discount points are prepaid interest paid to the lender at closing in exchange for a lower interest rate on the mortgage. Each point equals 1% of the loan amount.
Related Illinois Finance Questions
- What is 'cash flow from operations' in real estate investment versus 'equity reversion'?
- Which of the following describes 'negative amortization'?
- A mortgagor is best described as:
- A loan 'assumption' occurs when:
- What is 'earnest money' in an Illinois real estate transaction and how is it typically handled?
- Fannie Mae (Federal National Mortgage Association) was created primarily to:
- A 'bridge loan' in real estate is typically used when:
- Which of the following is an example of a government-sponsored enterprise (GSE)?
Practice More Illinois Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Illinois Quiz →