New Jersey Real Estate Practice Exam Practice Question
How much will the borrower pay in discount points?
Correct Answer: C
Rationale: To determine the amount paid in discount points, it’s essential to understand that each point typically equals 1% of the loan amount. If the loan amount is $640,000, then 10 points would cost $6,400.
Option A ($1,600) likely represents 1 point on a smaller loan amount, which does not align with the given context. Option B ($4,000) may correspond to 4 points, again suggesting a smaller loan. Option D ($8,000) indicates 8 points, which exceeds the reasonable cost for this scenario. Thus, $6,400 accurately reflects the cost for 10 points on a $640,000 loan, making it the most appropriate choice.
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