California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

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How much will a borrower pay for 1 point on a mortgage loan of $215,000 to secure a preferred interest rate?

$215
$2,150
$21,500
$215,000

The correct answer is: $2,150

A borrower will pay $2,150 for 1 point on a mortgage loan of $215,000 to secure a preferred interest rate. Points are considered prepaid interest and equal 1% of the loan amount. Therefore, option A is incorrect as it is only 1% of the loan amount, not the full loan amount. Option C is incorrect as it is 10% of the loan amount, which would be considered a very high rate for a point. Option D is incorrect as it is the full loan amount and would not be worth it for just 1 point. So, the only logical answer is option B, which is 1% of the loan amount and therefore, the amount a borrower would pay for 1 point to secure the preferred interest rate.