Finance
A Virginia lender charges a 1% origination fee on a $275,000 loan. The fee is:
A$1,375
B$2,750✓ Correct
C$5,500
D$27,500
Explanation
Origination fee = 1% × $275,000 = $2,750. To solve this, multiply the relevant values: $275,000 at 1%..
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Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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.
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