A Kentucky homebuyer purchases a property for $320,000. She makes a down payment of 10% and finances the remainder with a conventional mortgage. At closing, she is required to pay 1.5 discount points on the loan amount. How much will she pay in discount points at closing?
Correct Answer
B) $4,320
Step 1 — Calculate the loan amount: $320,000 × (1 - 0.10) = $320,000 × 0.90 = $288,000. Step 2 — Calculate discount points: 1 point = 1% of the loan amount. 1.5 points = 1.5% × $288,000 = 0.015 × $288,000 = $4,320. The buyer pays $4,320 in discount points at closing.
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