General Mortgage KnowledgeQuestion 119 of 400
What is the primary purpose of paying discount points at closing?
a.To increase the loan amount
b.To pay the appraiser
c.To lower the loan's interest rate
d.To fund the escrow account
Explanation
Discount points are prepaid interest that buy down (lower) the note rate, reducing the monthly payment over time. They do not increase the loan, pay the appraiser, or fund escrow reserves.
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