How much do points cost on a property sold for $525,000 with a good faith estimate of 2.5?

To calculate the cost of points on a property based on the sale price and the good faith estimate, you start by understanding what points are. Points represent a percentage of the loan amount and are typically used to reduce interest rates. Each point is equal to 1% of the loan amount.

In this scenario, the property is sold for $525,000, and the good faith estimate is 2.5 points. To find the cost of the points, you will first calculate the dollar amount of these points based on the sale price.

The calculation is as follows:

1. Determine how many points are being charged: 2.5 points (each point equals 1%).

2. Calculate the cost of points:

• Convert points to a percentage: (2.5% = 0.025)

• Calculate the cost:

[

0.025 \times 525,000 = 13,125

]

However, it seems there is some confusion in your answer. If the answer you selected calculates to $9,843.75, that would imply a different understanding or miscalculation of the point system.

In fact, if we correctly apply the point system,