Finance
A discount point on a mortgage represents:
A1% of the loan amount paid to reduce the interest rate✓ Correct
B1% of the purchase price paid to the seller
CA fee charged by the Iowa Real Estate Commission
D0.5% of the loan balance paid annually
Explanation
One discount point equals 1% of the loan amount. Borrowers pay points upfront to 'buy down' the interest rate, reducing monthly payments over the life of the loan.
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