The disadvantage to purchasing points is closing costs are an increased option (B) is correct.
What is a closing cost?
Fees paid at the conclusion of a real estate transaction are known as closing costs.
The complete question is:
Which of the following is a disadvantage to purchasing points
- A.they lower monthly payments
- B.closing costs are increased
- C.An immediate tax break is received
- D.the interest rate is lowered for the life of the loan
As we know, the payments paid directly to the lender during closing in exchange for a lower interest rate are referred to as mortgage points or discount points.
By doing this, the buyer lowers the rate, which lowers his monthly mortgage payments.
Thus, the disadvantage to purchasing points is closing costs are an increased option (B) is correct.
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