Lenders Are Offering Different Financing Options on 30-Year FRMs

Multiple Choice

Lenders are offering different financing options on 30-year FRMs.One lender offers a contract rate of 6% with one discount point while another lender offers a 6% contract rate with two discount points.Since both loans are discounted,which is the better option for the borrower based on the APR? Other factors are held constant and the borrower wants to minimize his/her borrowing cost.

A) 6% with one point
B) 6% with two points
C) can't determine without the loan amount
D) discounting doesn't matter,the APRs will be the same since the contract rates are the same