Loan Financing Costs: Discount Points, Prepayment Penalties & Fees

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

A borrower was charged a $6,000 origination fee for a $300,000 loan. How many points did the borrower pay?

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1. The cost of processing an application for a home loan is passed from the lender to the buyer and called a/an:

2. A charge of 2 discount points on a $450,000 loan is:

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About This Quiz & Worksheet

The purchase of a home often involves a home loan, and this quiz/worksheet combo will test your understanding of the associated loan financing fees. Questions will require you to identify or define key terms, as well as apply what you have learned about fee calculations using practice problems.

Quiz & Worksheet Goals

This quiz will assess your knowledge of the following:

  • Calculating the fees associated with home loans
  • Terms associated with the loan applications and interest
  • Penalties that can occur from loan prepayment

Skills Practiced

  • Defining key concepts - ensure that you can accurately define key phrases, such as prepayment penalties
  • Reading comprehension - ensure that you draw the most important information from the lesson on the terms and fees associated with home loans
  • Problem solving - use acquired knowledge to practice calculating common fees associated with financing a home

Additional Learning

To learn more about home loans, review the lesson called Loan Financing Costs: Discount Points, Prepayment Penalties & Fees. This lesson will help you learn more about the following:

  • What a mortgage is, and general details about this kind of loan
  • The difference between a promissory note and a mortgage
  • Interest charges on home loans
  • How prepayment penalty laws can differ by state
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