Discount points are prepaid what at closing?

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Multiple Choice

Discount points are prepaid what at closing?

Explanation:
Discount points are prepaid interest paid at closing to lower the mortgage rate. By paying points, you’re giving the lender a portion of the loan’s interest upfront in exchange for a lower rate over the life of the loan. This upfront cost, usually measured as a percentage of the loan amount (one point typically equals 1%), reduces your monthly payments later on. It’s different from property taxes (ongoing taxes), mortgage insurance (insurance related to loan default, either upfront or monthly), or general closing costs (the assortment of fees charged at closing).

Discount points are prepaid interest paid at closing to lower the mortgage rate. By paying points, you’re giving the lender a portion of the loan’s interest upfront in exchange for a lower rate over the life of the loan. This upfront cost, usually measured as a percentage of the loan amount (one point typically equals 1%), reduces your monthly payments later on. It’s different from property taxes (ongoing taxes), mortgage insurance (insurance related to loan default, either upfront or monthly), or general closing costs (the assortment of fees charged at closing).

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