Caleb purchased a house that sold for $231,000. He obtained a mortgage of $187,500. The bank charged 2.25 points for an origination fee and 2.5 discount points. What was the total cost of the origination fee and discount points that Caleb paid?

Question

anonymous · Answer

@jim_thompson5910

anonymous · Answer

$4,218.75
$10,972.50
$4,687.50
$8,906.25

jim_thompson5910 · Answer

Not sure, but 2.25+2.5 = 4.75 total points

1 point is 1% of the mortgage value I think?

if that is true, then you take 4.75% of $187,500

anonymous · Answer

oh i get it now i didn't think that the origination points were the same value as the discount. Thank you!

jim_thompson5910 · Answer

I'm not sure if they are, but I think they should be. I'd get a second opinion.