Scenario Silver Ledger raises this Florida point. A Florida borrower takes a loan of $361,250 and agrees to pay 2 discount points. How much do the points cost?
Correct Answer
A) $7,225
Discount points are a percentage of the loan amount, not the sales price. So the cost is $361,250 × 2% = $7,225.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
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