The market price of a house is $500,000 and the homebuyer will borrow $400,000. The borrower...
The market price of a house is $500,000 and the homebuyer will borrow $400,000. The borrower will pay 1 1/2 points to their mortgage banker to secure a lower interest rate of 3.5% versus 4% on the loan. What is the dollar value of the points charged to get the lower interest rate?
Homework Answers
Dollar value of points = mortgage amount * points / 100
Dollar value of points = $400,000 * 1.5 / 100
Dollar value of points = $6,000
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