General Mortgage KnowledgeQuestion 142 of 400
A lender offers to lower the rate for 3 discount points on a $200,000 loan. What is the total cost of buying the rate down?
a.$2,000
b.$6,000
c.$4,000
d.$3,000
Explanation
3 points = 3% x $200,000 = $6,000. $2,000 is one point, $4,000 is two points, and $3,000 does not match 3% of the loan.
Law Reference: TILA / Regulation ZPractice all 400 questions free — no signup required.
Related questions on this topic
- A borrower earns $7,200 gross monthly. The lender's maximum housing (front-end) ratio is 28%. What is the largest PITI the borrower can qualify for on that ratio?
- A borrower earns $9,000 gross monthly with a maximum back-end ratio of 43%. Existing monthly debts are $1,000. What is the largest PITI allowed?
- P&I is $1,100/month, monthly taxes are $250, monthly insurance is $90, and monthly PMI is $60. What is the total PITI payment?
- An ARM is at 5.00% and the fully indexed rate at adjustment is 9.00%, but the periodic (subsequent) cap is 2%. What is the new rate?
- An ARM is described with caps of 2/2/5. What does the final number (5) represent?
- What is negative amortization?
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NMLS SAFE Mortgage Loan Originator National Test · How we review