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:
A$4,000
B$8,000✓ Correct
C$2,000
D$40,000
Explanation
2 points = 2% of $400,000 = $400,000 × 0.02 = $8,000. To solve this, multiply the relevant values: $400,000 at 1%.. The correct answer is $8,000.. This is a common calculation on the Massachusetts real estate exam.
Related Massachusetts Finance Questions
- Under the Dodd-Frank Act, a 'Qualified Mortgage' (QM) provides lenders with protection from ability-to-repay liability because it:
- A Massachusetts borrower is comparing a 15-year and a 30-year mortgage at the same interest rate. The 15-year mortgage will have:
- In Massachusetts, a 'wraparound mortgage' involves:
- A Massachusetts co-op buyer finances their purchase differently from a condo buyer because co-op buyers finance:
- A buyer is pre-qualified for a loan. This means the lender has:
- Under the Home Mortgage Disclosure Act (HMDA), Massachusetts lenders must:
- A buyer's debt-to-income (DTI) ratio is calculated as:
- The Massachusetts Homeownership Opportunity Program (MassHousing) primarily serves:
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →