Finance
A Massachusetts borrower pays 2 discount points on a $350,000 mortgage. The dollar cost of the points is:
A$3,500
B$5,250
C$7,000✓ Correct
D$8,750
Explanation
Each discount point = 1% of the loan amount. 2 points × 1% × $350,000 = $7,000.
People Also Study
Related Massachusetts Questions
- Points paid on a mortgage to buy down the interest rate are also called:Finance
- In Massachusetts, 'points' paid by the buyer at closing to reduce the mortgage interest rate are called:Finance
- When a Massachusetts borrower obtains a FHA loan, the upfront mortgage insurance premium (UFMIP) is:Finance
- A Massachusetts lender charges '2 points' at closing to lower the buyer's interest rate. Each point costs 1% of the loan amount. On a $400,000 loan, the total cost of the points is:Finance
- A home sells for $525,000. The buyer pays a 20% down payment and finances the rest. The lender charges 1.5 discount points on the loan. How much will the buyer pay in discount points?Real Estate Math
- A buyer puts 15% down on a $480,000 property. The lender charges 1 origination point plus 0.75 discount points. What is the total points cost?Real Estate Math
- A Massachusetts property is purchased for $450,000 with a 25% down payment. If the lender charges 1.5 loan origination points, what is the cost of the points?Real Estate Math
- A Massachusetts property with a purchase price of $750,000 is purchased with a 20% down payment. The lender charges 2 discount points. What is the cost of the discount points?Real Estate Math
Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
Study This Topic
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →