PSI Virginia Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Virginia Real Estate Exam with our interactive quiz. Study using multiple choice and flashcards, complete with hints and detailed explanations. Ace your test with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What amount does one mortgage point cost in relation to the mortgage amount?

1 percent of the mortgage amount
2 percent of the mortgage amount
0.5 percent of the mortgage amount
1.5 percent of the mortgage amount

The correct answer is: 1 percent of the mortgage amount

One mortgage point is defined as an upfront fee that is equal to 1 percent of the total mortgage amount. When a borrower pays one point on a mortgage, they are essentially paying 1 percent of the loan amount to the lender, often in exchange for a reduced interest rate or a lower monthly payment. This means that if the mortgage amount is $200,000, one point would cost the borrower $2,000. Understanding this concept is crucial for borrowers, as points can significantly affect the overall cost of borrowing and the long-term financial implications of a mortgage.