Question

Which of the following is a disadvantage to purchasing points

A.they lower monthly payments
B.closing costs are increased
C.An immediate tax break is received
D.the interest rate is lowered for the life of the loan
Apex Answers

Answer 1

B - closing costs are increased

Explanation:

All of the other options are advantages to purchasing points. You want lower monthly payments (a), a tax break (c), and lower interest rate (d)

Answer 2

The correct answer is option B.closing costs are increased.

Step-by-step explanation:

Mortgage points or discount points refers to the fees paid directly to the lender during closing in exchange for a reduced interest rate.

In this way the buyer buys down the rate, that helps in reducing his monthly mortgage payments.

So, option A, C and D are the advantages of purchasing discount points.