Real Estate Math

An Oklahoma home is listed at $375,000. The seller offers to pay 2 discount points to buy down the buyer's interest rate. Each point costs 1% of the loan amount. If the loan is $300,000, what is the cost of 2 points?

A$7,500
B$6,000✓ Correct
C$3,750
D$3,000

Explanation

Cost of points = Loan Amount × Number of Points × 1%. $300,000 × 2 × 0.01 = $300,000 × 0.02 = $6,000.

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