Which items are fully negotiable between the borrower and lender?

The correct response highlights the fully negotiable aspects of a real estate transaction, specifically focusing on interest rates and discount points.

Interest rates are crucial in determining the cost of a mortgage over its term. They can be influenced by various factors, including market conditions, borrower qualifications, and the lender's policies, allowing borrowers to negotiate them based on their financial situation or preferences. Additionally, discount points, which are upfront fees paid to lower the interest rate on the loan, are negotiable as well. Both elements can be tailored to fit the needs of the borrower in a way that benefits them financially.

Focusing on why the other options are less appropriate helps clarify the concept of negotiability in real estate financing. Closing costs can vary between lenders but are often less negotiable as they are typically set by the lender and include various fees that cannot be changed freely. The loan term and payment schedule can sometimes be flexible, but they are not as commonly negotiated as interest rates and discount points. Credit scores, while critical in determining loan eligibility and pricing, are established by lenders and cannot be negotiated. Thus, interest rates and discount points represent the most viable negotiation aspects within a borrowing scenario.