67. How much will the borrower pay in discount points?
Answer: C
The borrower will pay $6,400 in discount points.
The borrower is responsible for paying $6,400 in discount points, which is typically a percentage of the loan amount that can be paid upfront to lower the interest rate.
A) $1,600
This option is incorrect because $1,600 does not accurately represent the calculated discount points based on the loan amount. It is significantly lower than what is typically required in such scenarios.
B) $4,000
This option is also incorrect as $4,000 does not meet the necessary amount for discount points for the given loan conditions. It underestimates the total points required.
C) $6,400
This option is correct as it accurately reflects the amount the borrower will pay in discount points. This sum is consistent with the standard calculation based on the loan's percentage.
D) $8,000
This option is incorrect because $8,000 exceeds the amount necessary for the discount points. It does not align with the standard calculations and is therefore not applicable.
Conclusion
The correct answer of $6,400 in discount points accurately reflects the cost that the borrower is obligated to pay, based on the loan's structure. Other options fail to represent the required payment, either by being too low or exceeding the correct amount, demonstrating a clear understanding of discount points in mortgage terms.