Finance
What is the primary purpose of discount points on a mortgage loan?
ATo increase the loan amount
BTo prepay interest and lower the interest rate✓ Correct
CTo reduce the down payment requirement
DTo extend the loan term
Explanation
Discount points are prepaid interest paid at closing to reduce the mortgage interest rate. Each point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
Related Oklahoma Finance Questions
- Oklahoma's usury laws historically capped interest rates on certain loans. Today, most mortgage interest rates in Oklahoma are governed by:
- The Truth in Lending Act (TILA) requires lenders to disclose the Annual Percentage Rate (APR), which reflects:
- Under the Equal Credit Opportunity Act (ECOA), lenders may NOT discriminate based on:
- A 'teaser rate' on an Oklahoma ARM can lead to payment shock when:
- A reverse mortgage in Oklahoma allows eligible homeowners to:
- A home equity line of credit (HELOC) in Oklahoma is best described as:
- Regulation Z implements which consumer protection law?
- Negative amortization on a mortgage occurs when:
Practice More Oklahoma Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oklahoma Quiz →