One would be more likely to pay discount points if she expected
A) to live in the house a short period of time.
B) to live in the house a long period of time.
C) interest rates to go up.
D) interest rates to go down.
E) interest rates to remain constant.

Question

Quizplus · Accepted Answer

Discount points are upfront fees paid to lower the interest rate on a mortgage loan. One would be more likely to pay discount points if they expect to live in the house for a long period of time. This is because the savings in monthly mortgage payments over the long run would outweigh the initial upfront cost of the discount points.

One Would Be More Likely to Pay Discount Points If