A Texas homestead is appraised at $600,000 with a first mortgage of $288,000. The homeowner takes the maximum home equity loan and pays 1.5 discount points at closing. How much will she pay in discount points?
Correct Answer
B) $2,880
Max total liens = $600,000 × 0.80 = $480,000. Max HEL = $480,000 − $336,000 = $192,000 (wait: let me check — $480,000 − $336,000 = $144,000). Actually: $600,000 × 0.80 = $480,000. $480,000 − $336,000 = $144,000. Points = $144,000 × 0.015 = $2,160. That matches B. Let me adjust the first mortgage: If first mortgage = $288,000, HEL = $480,000 − $288,000 = $192,000. Points = $192,000 × 0.015 = $2,880. That matches C.
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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.
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.
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A Texas homeowner takes a $180,000 home equity loan at 5% annual interest. The lender charges the maximum allowable 3% fee. What is the total of fees plus first month's interest?
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