Without buying points, a monthly mortgage payment will be $958. buying 1 point at closing would reduce the payment to $948.75. if each point costs $1000.00, rounded to the nearest year, how long would it take to break even by buying 1 point? a. 7 years b. 8 years c. 9 years d. 10 years

The correct option is C. 9 years

Step-by-step explanation:

Monthly mortgage payment without buying points = $958.

Monthly mortgage payment buying 1 point:  $948.75

⇒ Payment reducing in one month = $958 - $948.75

                                                           = $9.25

Also, Payment reducing in one year = $9.25 x 12

                                                            = $111

Now, given that each point costs $1,000, rounded to the nearest year

We need to find how long would it take to break even by buying 1 point.

Therefore, It would take 9 years to break even by buying 1 point.

Hence, The correct option is C. 9 years