Finance
What is 'points' in mortgage financing, and how do they affect the cost of a Pennsylvania home loan?
AA point equals one dollar of fees charged at closing
BEach point equals 1% of the loan amount; discount points lower the interest rate while origination points are lender fees✓ Correct
CPoints are the number of years required before a mortgage can be refinanced
DPoints are the percentage fee paid to a mortgage broker from the lender's yield spread
Explanation
Mortgage points are fees equal to 1% of the loan amount each. Discount points are prepaid interest that lowers the interest rate (buying down the rate), while origination points are lender compensation.
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