What are Discount Points (or Points)?
A one-time charge imposed by the lender to lower the rate at which the lender would otherwise offer the loan to you. Each point is equal to one percent (1%) of the mortgage amount.
For example, if a lender charges two points on a $80,000 loan this amounts to a charge of $1,600.
Additional Mortgage FAQs
- How does an escrow account work?
- What are Discount Points (or Points)?
- What are the common fees through the mortgage process?
- What are the steps in the Mortgage Process?
- What is a Loan To Value Ratio (LTV)?
- What is a Rate Lock or Lock In?
- What is a Truth-in-Lending Disclosure and why do I receive it?
- What is Private Mortgage Insurance (PMI)?
- What is the difference between a Mortgage Broker & Mortgage Banker?
- What is the difference between Interest Rate & APR?