FinancingQuestion 81 of 120
A borrower pays $5,250 in discount points on a $350,000 loan. How many points did the borrower pay?
a.1.5 points
b.2 points
c.2.5 points
d.3 points
Explanation
Points paid equal the dollar amount divided by the loan amount, so $5,250 / $350,000 equals 0.015, or 1.5 points. Each point equals one percent of the loan. Points are used to buy down the interest rate.
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