Finance
Discount points paid at closing on a Texas mortgage loan are used to:
ACover lender origination costs only
BBuy down (reduce) the interest rate on the loan✓ Correct
CPay the borrower's property taxes in advance
DFund the lender's escrow reserve account
Explanation
Discount points are prepaid interest that the borrower pays at closing to reduce the loan's interest rate. Each point equals 1% of the loan amount and typically reduces the rate by 0.125–0.25%.
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