Question

Points paid at closing are for payment of

A) finance charges or interest.
B) loan processing.
C) property taxes.
D) inspections.

Answer 1

Points paid at closing are for the payment of finance charges or interest. These points are essentially prepaid interest by the borrower to the lender in exchange for a lower interest rate on the loan.

Step-by-step explanation:

Points paid at closing are for the payment of finance charges or interest. These points are essentially prepaid interest by the borrower to the lender in exchange for a lower interest rate on the loan. By paying points, the borrower reduces the overall interest that they will pay over the life of the loan.