A New York lender in 2026 charges a point that lowers the rate by 25 basis points. Assuming all other loan terms remain unchanged, does the rate reduction meet the presumption for a bona fide discount point?
Correct Answer
B) Presumed bona fide, all other loan terms remaining the same
It shall be presumed that a point is a bona fide loan discount point if it reduces the interest rate by a minimum of twenty-five basis points provided all other terms of the loan remain the same. Other choices: the statute fixes the presumption at that level; the figure is 25 rather than 50; and a borrower request is not the test. Source: N.Y. Banking Law § 6-l(1)(c)
Why This Is the Correct Answer
It shall be presumed that a point is a bona fide loan discount point if it reduces the interest rate by a minimum of twenty-five basis points provided all other terms of the loan remain the same. Other choices: the statute fixes the presumption at that level; the figure is 25 rather than 50; and a borrower request is not the test. Source: N.Y. Banking Law § 6-l(1)(c)
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