Finance
Discount points on a South Dakota mortgage loan represent:
AFees charged by the SDREC for loan approval
BPrepaid interest paid upfront to reduce the loan's interest rate✓ Correct
CThe lender's profit margin above market rates
DPoints deducted from a buyer's credit score
Explanation
Each discount point equals 1% of the loan amount paid upfront to reduce the interest rate, typically by 0.125–0.25% per point. Buyers may pay points to lower their monthly payment.
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