A Florida borrower takes a loan of $324,000 and agrees to pay 2.5 discount points. How much do the points cost?
Correct Answer
D) $8,100
Discount points are a percentage of the loan amount, not the sales price. So the cost is $324,000 × 2.5% = $8,100.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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