Finance
A Louisiana buyer's loan officer quotes a 30-year fixed rate of 7.25% with 1 discount point. One discount point equals:
A$100 regardless of loan amount
B1% of the loan amount paid upfront to reduce the interest rate✓ Correct
C1% of the property value
DOne month's prepaid interest
Explanation
One discount point equals 1% of the loan amount paid upfront at closing. Points are prepaid interest used to buy down the interest rate. On a $300,000 loan, one point = $3,000 paid at closing.
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