On an Illinois mortgage-closing worksheet, how are discount points typically calculated?
Correct Answer
B) As a percentage of the loan amount.
One discount point equals 1% of the loan amount. For example, two points on a $250,000 loan equals $5,000 paid at closing. Borrowers pay points to buy down the interest rate, and this calculation is standard across Illinois mortgage-closing worksheets and federally required Loan Estimate disclosures.
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A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
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