Finance
Discount points on a mortgage loan represent:
AThe lender's origination fee divided by the loan amount
BPrepaid interest paid at closing to reduce the loan's interest rate✓ Correct
CThe difference between list price and sale price
DPMI premiums paid upfront
Explanation
Discount points are prepaid interest charged at closing. Each point equals 1% of the loan amount and typically reduces the interest rate by about 0.25%.
Related Kansas Finance Questions
- What is an 'appraisal contingency' in a Kansas purchase contract?
- In Kansas, what is a 'swing loan' (also called a bridge loan) typically used for?
- In Kansas, a '2/1 buydown' mortgage means the interest rate is:
- What is a 'VA loan' and who may use one in Kansas?
- What is a 'reverse mortgage' and who typically uses it in Kansas?
- A balloon mortgage in Kansas features:
- What is 'negative amortization' in a Kansas mortgage?
- A Kansas borrower with significant student loan debt is applying for a mortgage. How does the lender treat student loan debt in the DTI calculation?
Practice More Kansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Kansas Quiz →