For the Jacksons buying a home for $320,000, how much will they pay in fees for a discount fee of 3 points on their $300,000 loan?

For the Jacksons buying a home for $320,000, how much will they pay in fees for a discount fee of 3 points on their $300,000 loan?

• A. $6,000
• B. $9,000
• C. $12,000
• D. $15,000

Answer: (B)

To calculate the fees for a discount point on a loan, you first need to understand what a point represents. One point is equivalent to 1% of the loan amount. In this scenario, the Jacksons have a loan amount of $300,000 and are subject to a discount fee of 3 points. Calculating the cost of the points involves multiplying the loan amount by the number of points and then converting that percentage into a dollar amount. For 3 points on a $300,000 loan: 1. Calculate the dollar amount of one point: - 1 point = 1% of $300,000 - 1% of $300,000 = $3,000 2. Now, multiply by the number of points (3) to find the total fees: - 3 points = 3 x $3,000 = $9,000 Therefore, the total fees the Jacksons will pay as a result of the discount points on their loan equate to $9,000. This demonstrates how discount points can impact the total costs associated with securing a mortgage. The other choices reflect amounts that do not correctly apply the 1% per point calculation relative to the loan amount, thereby

To calculate the fees for a discount point on a loan, you first need to understand what a point represents. One point is equivalent to 1% of the loan amount. In this scenario, the Jacksons have a loan amount of $300,000 and are subject to a discount fee of 3 points.

Calculating the cost of the points involves multiplying the loan amount by the number of points and then converting that percentage into a dollar amount.

For 3 points on a $300,000 loan:

1. Calculate the dollar amount of one point:

• 1 point = 1% of $300,000

• 1% of $300,000 = $3,000

2. Now, multiply by the number of points (3) to find the total fees:

• 3 points = 3 x $3,000 = $9,000

Therefore, the total fees the Jacksons will pay as a result of the discount points on their loan equate to $9,000. This demonstrates how discount points can impact the total costs associated with securing a mortgage. The other choices reflect amounts that do not correctly apply the 1% per point calculation relative to the loan amount, thereby