Mortgage points are a percentage of your loan you pay in order to lower your interest rate. Closing costs involve additional expenses that cover the administration of the loan (among other things).
Watch the video to learn more about Interest, Points, and Closing Costs, then test your knowledge at the end of the lesson.
Which of the following factors makes the biggest difference in what you pay over the life of a loan?
A. Spousal status
B. Education
C. APR
D. MLS
A mortgage point – also called a discount point – equals 1% of the total loan amount, and each purchased point can drop your interest rate by 0.125% to 0.25%.
A. True
B. False
What type of fees are not included in closing costs?
A. Loan origination fees
B. Survey fees
C. Document preparation fees
D. Transportation fees