On a $280,000 loan, the lender charges a 2 point service charge. How much does the borrower have to pay for just these two points-----$5,600
What does it mean when a lender charges 2 points?
Points are calculated in relation to the loan amount. Each point equals one percent of the loan amount. For example, one point on a $100,000 loan would be one percent of the loan amount, or $1,000. Two points would be two percent of the loan amount, or $2,000.
Similarly ,
one point of $280,000 loan for one percent would be $2800
for two points it will be 2800×2= $5600
Hence , borrower will pay $5600.
What is the mortgage?
A mortgage is an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest. Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.
Who holds a mortgage?
The "holder" (or "investor") is the owner of your loan. The holder has the right to enforce the loan agreement. The loan agreement consists of: a promissory note,
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