Finance
In Michigan, 'points' paid at mortgage closing are:
AAlways refundable if the loan is paid off early
BPrepaid interest charges equal to 1% of the loan amount per point, paid to lower the interest rate✓ Correct
CPenalties for late mortgage payments
DFees charged by the title company
Explanation
Discount points are prepaid interest: each point equals 1% of the loan amount and buying points reduces (buys down) the mortgage interest rate. Points are a closing cost, generally not refundable, but may be deductible for income tax purposes.
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