Finance
Points paid on a mortgage loan in Utah are:
AIllegal prepaid interest charges
BPrepaid interest paid to the lender to reduce the interest rate (buying down the rate)✓ Correct
CFees paid to the Utah Division of Real Estate
DClosing cost credits from the seller
Explanation
Discount points are prepaid interest paid at closing to 'buy down' (reduce) the loan's interest rate. One point equals 1% of the loan amount.
People Also Study
Related Utah Questions
- A Utah mortgage lender who charges a higher interest rate to a borrower of a specific race, despite the borrower qualifying for a lower rate, is committing:Finance
- A point paid on a Utah mortgage loan equals:Finance
- A Utah buyer's FHA loan requires 3.5% down on a $320,000 purchase. How much is the upfront mortgage insurance premium (UFMIP) at 1.75% of the base loan amount?Real Estate Math
- A loan origination fee of 2 points on a $300,000 mortgage equals:Finance
- The annual percentage rate (APR) on a mortgage loan is higher than the stated interest rate because it:Finance
- A buyer's closing costs include 2 discount points on a $320,000 loan. How much are the points?Real Estate Math
- An investor's cap rate is 7% and they want to value a property with an NOI of $35,000. Using a 25% down payment, what is the loan amount?Real Estate Math
- A home sold for $550,000 with 3.5% FHA down payment. What is the loan amount and the upfront MIP at 1.75%?Real Estate Math
Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
Study This Topic
Practice More Utah Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Utah Quiz →