Question

If a house was sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for $38,500, how much money would the buyer pay in discount points if the lender charged four points?

Answer 1

Answer:

correct answer is $1,544 Explanation:

given data

sold = $40,000

mortgage loan = $38,500

solution

we know that here 1 discount point cost of buyer of loan = 1 %

so discount point = $38,500 × 1%  = $38,500 × 0.01 = $385

and

Points are always paid on the loan amount = $385 × 4

Points are always paid on the loan amount = $1,540 in discount points

so correct answer is $1,544