Finance
What is a discount point in Nevada mortgage financing?
AA penalty paid for paying off a mortgage early
BA prepaid interest payment to the lender equal to 1% of the loan amount that reduces (buys down) the interest rate✓ Correct
CA fee charged by the title company at closing
DA reduction in the purchase price negotiated by the buyer
Explanation
A discount point equals 1% of the loan amount and is paid upfront to reduce the interest rate. Nevada buyers can 'buy down' their rate by paying points at closing. Whether points make financial sense depends on how long the buyer plans to keep the loan.
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