Finance
A Rhode Island seller agrees to pay 2 discount points on a buyer's $280,000 mortgage to help the buyer obtain a lower interest rate. What is the cost of the discount points?
A$2,800
B$4,200
C$5,600✓ Correct
D$8,400
Explanation
Each discount point equals 1% of the loan amount. 2 points on $280,000 = 2% x $280,000 = $5,600. Using the values given ($280,000), apply the appropriate formula.. The correct answer is $5,600.. This is a common calculation on the Rhode Island real estate exam.
Related Rhode Island Finance Questions
- A short sale in Rhode Island occurs when:
- Rhode Island Housing (the Rhode Island Housing and Mortgage Finance Corporation) primarily serves:
- In Rhode Island, which type of lien takes priority over a first mortgage?
- What is 'prepayment privilege' in a Rhode Island mortgage?
- What is 'impound account' or 'escrow account' in the context of a Rhode Island mortgage?
- What is 'mortgage acceleration' in Rhode Island lending?
- What is 'commercial mortgage-backed securities' (CMBS) and how do they relate to Rhode Island commercial real estate?
- The Rhode Island Realty Transfer Tax is charged at a rate of:
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →