Today's questionFinancing & Settlement
A borrower is purchasing a home with a conventional loan and is paying points to lower their interest rate. What are points?
- A. A type of insurance that protects the lender.
- B. A fee paid to the lender to lower the interest rate.
- C. A type of tax paid by the borrower.
- D. A fee paid to the appraiser.
Answer
Answer: B
Points are a fee paid to the lender to lower the interest rate on the loan, and are typically expressed as a percentage of the loan amount.
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