Finance
Points paid on a mortgage loan are:
AMonthly insurance premiums added to the payment
BUpfront fees equal to 1% of the loan amount per point, often used to buy down the interest rate✓ Correct
CPenalties for paying off the loan early
DCharges assessed only on FHA loans
Explanation
One mortgage point equals 1% of the loan amount. Discount points are paid upfront to reduce (buy down) the interest rate, while origination points are fees for processing the loan.
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