The answer is $3500.
You are simply asking for the equivalent of 2 points for the mortgage of $175,000. Since 1 point is equal to 1% of the mortgage, 2 points is 2% of the mortgage then.
Equation:
Y = P% * X
Y = 2% * 175000
Convert P into decimal: P = 2/100 = 0.02
Y = 0.02 * 175000
Y = 3500
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