A customer is seeking a $150,000 home mortgage.The bank requires the customer to pay 1¾ points up front.How much of the loan amount will actually be available to the customer if the bank approves the loan?

Question

Quizplus · Accepted Answer

1¾ points is equivalent to 1.75% of the loan amount.
So, upfront cost = 1.75% of $150,000
= 0.0175 x $150,000
= $2,625
This amount is subtracted from the loan amount to give the actual amount available to the customer:
$150,000 - $2,625 = $147,375

A Customer Is Seeking a $150,000 Home Mortgage