Discount points in West Virginia are used to:
Correct Answer
B) Buy down the interest rate
Discount points are prepaid interest paid at closing to reduce the mortgage interest rate. One point equals 1% of the loan amount. Paying points results in lower monthly payments over the loan's life, making them beneficial for long-term ownership.
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Related Topics & Key Terms
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Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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