Definitions for

**"Discount Points"****Related Terms:**Discount point, Points, Point, Origination points, Loan discount, Loan origination fee or points, No-cost loan, Lending rate, Mortgage points, Loan origination fees, Discount loan, Loan origination fee, Discount, Origination fees, Comparison rate, Annual percentage rate, Interest rate, Yield spread premium, Base loan amount, Origination fee, Early repayment charge, Added to loan, Annual percentage rate (apr, Arrangement fee, Redemption penalties, Discount, Early repayment charges, Truth in lending disclosure, Loan fee, A.p.r, Early redemption fee, Rate, Discount mortgage, Interest accrual rate, Buy down, Redemption penalty, Apr, Til, Warehouse fee, Early redemption charge, Deferred establishment fee, Booking fee, Redemption charges, Interest, Break costs, Aapr, Effective interest rate, Upfront costs, Early redemption charges, Cashback

A fee charged by the lender when making an FHA or VA loan to offset the lower interest rate the lender will receive compared with conventional loan interest rates. One point is equal to 1 percent. Back to the Top

MP] Same as Points.

Discount points are purchased to lower the interest rate on the loan. Each point counts as one percent of the loan.

The total percentage amount in addition to the one percent loan origination fee in government loans. A "point" is one percent of the loan amount.

Amounts paid to the lender (usually by the borrower) at the time of origination of a loan, to account for the difference between the market interest rate and the lower face rate of the note.

An up-front fee paid to the lender to get a lower interest rate on your loan. Each point equals one percent of your loan amount.

A percentage of the principal amount of a loan that is collected by the lender at the time the loan is originated.

A charge made by the lending institution to the borrower that is based on the mortgage amount. A point is one percent of the principal mortgage amount.

The Amounts paid to the lender (based on percentage of the loan amount) to buy down the interest rate. Each point charged represents one percent of the loan amount; for example, one point on a $100,000 mortgage is $1,000. In general, paying one point on a 30 year fixed mortgage reduces your interest rate 1/8 (.125) of a percent.

A one-time charge paid by the borrower or seller and used by the lender to reduce the interest rate for the mortgage loan. One Discount Point (or "Point") is equal to 1 percent (1%) - on a $100,000 loan, 1 Point would equal $1,000.

A one-time charge assessed at closing to decrease the interest rate. One point is equal to 1/4 percent of the loan amount.

A one time charge by the lender to decrease the interest rate of a loan. A point is one percent of the amount of the mortgage.

Discount points are the sum a borrower pays the lender to lower his or her interest rate. Discount points, as the name suggests, are typically expressed as a % of the loan amount.

Amounts paid to the lender (often by the seller) to make up the difference between the market interest rate and the lower face rate of the Note (see Glossary).

One discount point is equal to 1 percent of your loan amount. For example, on a $150,000 loan 1 discount point equals $1,500. Discount points are paid to obtain a lower interest rate on your mortgage.

An amount paid by borrower or seller to the lender at the origination of a loan to account the difference between the market interest rate and a lower face interest rate on the loan note. A discount point is equal to 1% of the loan amount.

The cost of buying down an interest rate a lender charges. If it cost 1 point (or 1% of the loan amount) to buy the rate down .25% on a $250,000 loan size, it would cost $2,500 in fee.

A lender charges the borrower a percentage of the loan to buy an interest rate that is lower than the market rate. A point is equal to one percent.

A charge calculated as a percentage of the loan amount to compensate the lender for the difference between the stated interest rate of the loan and current market rates.

One-time lender charge for originating a loan; a point is 1 percent of the mortgage amount. Also known as Points.

A point is equal to one percent of the loan amount. Points are used to increase the lender's yield on the loan.

A sum a borrower pays to a lender to decrease the interest rate of a mortgage. A point equals one percent of the loan amount.

Fees that a borrower pays when the lender makes the loan, to get a lower interest rate. Lenders offer various rate/point combinations, and borrowers pay points to adjust the interest rate to the market rate. One point equals one percent of the loan amount.

A fee paid to lenders to lower the interest rate on the mortgage. One point equals one percent of the total mortgage amount.

A fee based on a percentage of a loan, charged by a lender, as a service charge, or as an amount needed to produce the same yield on an FHA or VA loan that he would receive in the conventional mortgage market; each point charged represents 1% of the loan amount and increase the interest rate by a 1/8 of one percent.

One point equals one percent of the total mortgage amount. This is a fee paid to lenders to get lower rate on the mortgage.

In a real estate transaction it is the amount withheld from the loan proceeds by the Lender. This amount is used to adjust the interest rate of the loan to the required yield.

An amount of money equal to 1% of the principal amount of an investment or note. Loan discount points are a one-time charge assessed at closing by the lender to increase the yield on the mortgage loan to a competitive position with other types of investments.

The term "point" refers to one percent of the loan amount. For example, one "point" on a $100,000 loan would equal $1,000. It is generally the cost assessed by a lender or broker to provide you with the loan, but you may also choose to pay points to lower your interest rate.

Charge added by the lender which ranges from 1% to 6% of the loan amount. Each point is 1% of the loan amount. For example, on a $100,000 loan with four points, you will prepay $4,000. Discount points are added in order to qualify you for the lowest possible interest rate.

One discount point is equal to 1% of your loan amount. In other words, one discount point on a $100,000 mortgage loan equals $1,000. Discount points are paid to obtain a lower interest rate on your mortgage. The more points you pay, the lower the rate.

One point is equal to one percent of the loan amount; used for various loan charges.

A fee charged by lenders to reduce the initial interest rate. Discount points are a percentage of the loan amount you can pay to reduce your initial interest rate. One "point" equals 1% of the loan amount.

The amount of money you can choose to pay when you first get a loan to reduce its overall interest rate. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000).

Amounts paid to the lender at the time of a loan origination, to account for the difference between the market interest rate and the lower face rate of the note. Each point is 1 percent of the loan amount.

A one-time charge paid by the borrower to the lender at closing to obtain a lower interest rate on the mortgage loan. One point equals 1% of the loan amount; therefore, two points on a $100,000 mortgage would cost $2,000. (Also known as 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.

Amount payable to the lending institution by the borrower or seller to increase the lender's effective yield. The more discount paid results to a lower interest rate; the less discount points paid results to a higher interest rate.

An amount paid in addition to a loan fee in exchange for a lower interest rate on the loan.

refers to points saved in connection with an FHA or VA loan. Will fluctuate with money market.

The prepayment of interest to give the lender their desired rate of return which can maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $200,000 mortgage would equal $4,000). Because it is a financing cost it is based on the loan amount, not the purchase price.

Amount paid to the lender when the loan is originated to account for the difference between the current market-determined cost of interest and the actual lower interest rate of the loan. Points may be paid by either the buyer or seller. Each point is equal to one percent of the original loan amount.

Sometimes referred to as simply "points". Each point is equal to one percent of the loan amount and allows you to "buy down" your initial interest rate. Typically, your rate can be lowered approximately one-quarter of one percent for each discount point paid at closing. Points are considered part of your closing cost.

A fee, expressed a percentage of the loan amount, when making a loan. Points increase the yield.

A reduction in net loan proceeds to make the effective interest rate equal the lender's current yield requirement.

You can sometimes lower your interest rate by paying more money up front. One discount point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000).

Amount payable to the lending institution to increase the lenders' effective yield. Each point is equal to 1% of the mortgage. The borrower can often secure a lower mortgage interest rate by paying more points.

The amount of money the borrower or seller must pay the lender to get a mortgage at stated interest rate. This amount is equal to the difference between the principal balance on the note and the lesser amount which a purchaser of the note would pay the original lender for it under market conditions. A point equals one percent of the loan.

A point is equal to 1% of the total loan amount (not sale price). Discount points are used to buy down the interest rate on the loan by paying a onetime discount fee up front. (Some loans require the seller to pay any discount points).

Discount points are fees paid to reduce the interest rate when taking out a mortgage. Each point represents one percent of the loan. So if you pay 2 points on a loan of $100,000, you will pay an additional $2,000 upon closing. To find out if paying points is worth it, use this calculator. Discount points, unlike origination points, are tax-deductible. If you're using the loan to purchase your primary residence, you can usually take the entire deduction in the year the loan closes. For most refinances, you must spread out the deduction over the life of the loan. You can read more about it on the IRS site, here and here.

Amount payable to the lending institution by the borrower to buy down the interest rate on the loan. One point is equal to 1% of the loan.

one-time charge imposed by the lender or broker to lower the rate at which the lender or broker would otherwise offer the loan. It is sometimes referred to as a "loan discount."

A fee paid to a mortgage lender by a borrower to get a lower interest rate on the mortgage loan. One point equals one percent of the loan amount.

Fees that a borrower pays when a lender makes a loan to receive a lower interest rate. Borrowers pay points to adjust the interest rate to the market rate. One point equals 1 percent of the loan amount. For example, two points on a $200,000 loan would be $4,000.

See point.

A tax-deductible fee that allows a borrower to acquire a very low rate. The deduction is amortized over the life of the loan on refis, but is fully deductible on purchases. The borrower can buy down their rate with this discount point or points.

Fees charged by a lender to provide a lower interest rate. One discount point equals one percent (1%) of the loan amount.

A fee paid to a lender representing one percent of the loan amount. Points may be required to secure a certain interest rate. If you build and finance your home with Jim Walter Homes, you will not pay any points.

Fees that a borrower may pay to attain a lower rate of interest. Each point is equal to one percent of the loan amount.

One point equals one percent of the loan amount. Points are used to lower the interest rate. One point does not equate into lowering the interest rate one percent. Generally lowering the interest rate 1/8 will cost about 1/2 point, although this can vary based on daily pricing. Typically is tax deductible. (see Links for accountant advice)

Percentage of loan amount, payable to the lender, representing the difference between the loan yield and the investment value of the money.

Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.

An initial fee paid to the lender to lower the interest rate on a loan

Amounts paid to the lender based on the loan amount to buy the interest rate down. Each point is one percent of the loan amount; for example, two points on a $100,000 mortgage is $2,000.

A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.

A percentage of the mortgage paid to the lender to lower the interest rate on a loan. One point equals one percent.

These allow you to lower your interest rate. They are essentially prepaid interest, with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point.

"In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any ""points"" paid in addition to the one percent loan origination fee. A ""point"" is one percent of the loan amount."

A single charge imposed by the lender to adjust the interest rate of the loan to the required yield.

Payment of â€œpointsâ€ (about 1% of the mortgage amount for each 1/8 of 1% change in simple interest) in the form of cash to the lender assures the same return as the lender would have received if the loan were issued at the going interest rate. These fees are also called commitment fees or origination fees (Tip â€“ many employers will reimburse a transferring employee for 1 or more discount points.). Take advantage of this benefit, as it will save you thousands of dollars in interest.)

Points are a percentage of the loan amount paid at closing that may affect the interest rate. For instance, on a $90,000 loan amount, 1 point = 1 % or $900. Points are typically paid to buy down the rate. Alternatively, in exchange for a higher rate, the lender may pay points to offset a borrower's closing costs. These are considered negative points

A device used to vary interest rate returns for lenders and investors. Each discount point is equal to one percent of the loan amount.

As an incentive to volume advertisers, Aaddzz discounts the cost of advertisng to high volume advertisers. Discount points refers to the percentage discount applied to impression or click-thru charges. See also: Pricing: Volume Discounts and Discount Volume

Also referred to as 'Points'. A percentage of the loan amount that a lender requires to make a mortgage loan. Each point is 1% of the loan amount and is a one time charge, collected at closing, and passed on to an investor to increase the yield on the mortgage loan. Generally the interest rate is lowered with each point that is charged.

Amount payable to the lender at closing by the borrower or seller to obtain a particular loan program and/or interest rate. One point is equal to one percent of the loan amount.

A cost, paid to the lender, that may be added to a loan. A "point" is one percent of the loan amount. (Usually only used in government loans, i.e. FHA and VA loans.)

Discount points are often used to describe a type of fee that lenders charge. Discount points are additional funds you pay the lender at closing to get a lower interest rate on your mortgage.

Points represent an optional, one-time charge paid to the lender at the time of closing. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000).

Calculated as one percent of the loan amount, points or discount points are charged by the lender to issue a loan at below-market rates. Buyers and sellers, or buyers and lenders, can negotiate points. Those points charged as prepaid interest may be tax deductible for the buyer, depending on his or her tax bracket.

Fees paid to a lender to reduce the interest rate.

A point or discount point is one percent of the loan amount and is charged by the lender to issue a loan at below market rates. Points can be negotiated between buyer and seller or buyer and lender. Points charged as prepaid interest are tax deductible by the buyer based on one's tax bracket.

An added loan fee charged by a lender to make the yield on a lower-than-market interest VA or FHA loan competitive with higher interest conventional loans.

A loan fee charged by a lender of FHA, VA or conventional loans to increase the yield on the investment. One point=1% of the loan amount.

Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan.

The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000).

Fee charged by the lender to decrease the interest rate on a loan.

One point equals one percent of the loan amount. Paying points has the effect of giving the lender a higher yield.

A fee that allows a borrower to obtain a lower interest rate. The borrower will usually pay this fee at the time of closing. One (1) point equals one (1) percent of the loan amount.

Payable to the lender by the borrower or seller to decrease the interest rate. One point is equal to 1 percent of the loan amount.

See Points.

Amounts paid to the lender in order to obtain a lower rate. One discount point is equal to one percent of the loan amount.

A percentage of the loan amount which is charged or credited by the lender upon making a mortgage loan. Loans that are made at the present market rate, with no points, are considered to be made at "par." Because of the lender's ability to charge or credit points on an individual loan, the lender is able to tailor a loan program and interest rate to fit the needs of each individual borrower. Discount points can be negotiated in the Purchase Contract to be paid by either the seller or the borrower. Each point equals 1% of the mortgage loan. For example, a charge of 1 point on a $50,000 loan would result in a charge of $500; 1/2 point would be $250 ($50,000 x .50%).

Charged to buy the interest rate below current market over the life of the loan. They are charged as a percent of the loan amount - 1 point equals 1%. Generally, 1 point will buy the interest rate down 0.25%. However, because of rounding and required investor yield this is only a "rule of thumb". Discount points are tax-deductible because they are prepaid interest; they make up the difference needed to get the desired yield over the life of the loan.

A one time charge by a lender to increase or decrease the stated interest rate on a loan.

Decreasing an interest rate by paying fees to a lender.

A one time charge by the lender to increase the yield of the loan. A point is one percent of the amount of the mortgage.

A negotiable fee paid to the lender to secure financing to the buyer. Discount points are interest charges paid up-front to reduce the interest rate on the loan over the life or a portion of the term.

Quoted in percentage of the total loan ( 1 point = 1%). This amount of money is deducted by the lender as a fee for making the loan. Market conditions determine if there are any points charged and how much.

One point equals one percent of the loan amount. Two points on a $200,000 mortgage would cost $4,000.

Sometimes referred to simply as points, a discount point is an amount equal to 1% of the principal amount of the loan given by the seller or buyer to the provider of the mortgage. These points are a one-time charge assessed at closing. Points are typically used to "buy down" the interest rate for the life of the loan.

Prepaid interest paid by the borrower to the lender to reduce the interest rate on the loan. Each point is one percent of the loan amount.

An amount paid at closing to lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (e.g., two points on a $100,000 mortgage would total $2,000).

Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g. one point on a $100,000 mortgage would cost $1,000).

A negotiable fee paid to the lender to secure financing for the Buyer. Discount points are upfront interest charges to reduce the interest rate on the loan over the life, or a portion, of the loan's term. One discount point equals one percent of the loan amount.

The amount payable to the lending institution by the borrower or seller to increase the lenders effective yield. One discount point is equal to 1 percent of the loan.

Points are fees added on to a loan and are paid when the loan closes. One point equals one percent of the loan amount. There is an inverse relationship between the interest rate and the number of points paid. In other words, you can lower your monthly mortgage payments by paying more money up front through points.

Amount paid to the lender by the borrower to decrease the interest rate. One point is equal to one percent of the loan amount.

Additional charges made by the lender at the time a loan is made. These additional interest charges are paid at the time a loan is closed to increase the rate of return to the lender so as to approximate market level. One point = one percent.

An added loan fee charged by a lender to make the yield on a lower than market value loan competitive with higher interest rate loans. One point is equal to one percent of the loan.

a point is one percent of the mortgage loan amount. A buyer may pay points in order to lower his/her interest rate. For example, if the going rate is 7.5% with no points, a buyer may pay 4 points and secure a 7% loan.

Prepaid interest charged at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000).

A percentage of the loan amount paid to the lender to buy down the interest rate. Each point is one percent of the loan amount; for example, two points on a $100,000 mortgage is $2,000.

Fees that a borrower pays at the time the lender makes the loan. A point equals 1 percent of the total loan amount.

A term used in government subsidized loans, such as FHA and VA loans. Refers to any "points" (one percent of the loan amount) paid in addition to the one percent loan origination fee.

a type of point paid by the borrower that reduces the interest rate of the loan.

Type of fee that you pay to the lender. One point is equal to one percent of the of the loan amount.

An amount, in excess of the one percent mortgage origination fee, paid to the lender to reduce the interest rate of a loan. A point equals one percent of the total value of the loan.

A prepaid interest fee associated with the note rate for your loan, the more discount points you pay, the lower interest rate you can obtain.

A type of point (1 percent of a loan) paid by the borrower to reduce the interest rate. Back

Usually associated with FHA and VA loans. They buyer may receive discount points to lower the interest rate by paying an additional sum down payment with the loan origination fee.

These are the funds paid at closing to obtain a particular loan program and/or interest rate. One discount point equals one percent of the loan amount. Discount points may be paid by either the buyer or the seller.

Points are an up-front fee paid to the lender at the time that you get your loan. Each point equals one percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing.

Prepaid interest assessed at closing by the lender. Each point is equal to one percent of the loan amount. Example: 3 points on a $100,000 mortgage would cost $3,000

The fees paid to obtain a loan. Each point is one percent of the total loan amount.

Interest prepaid to lower the interest rate on the loan.

Each point is equal to 1% of the loan amount. This increases or equalizes the lender's yield (includes the interest rate charged, discount points paid and other charges collected) or rate of return. Even the FHA charges 1 point up front in their closing costs.

Fees paid to the lender for the loan. One point equals one percent of the loan amount. Points are usually paid in cash at closing. In some cases, the money needed to pay points can be borrowed, but doing so will increase the loan amount and the total costs.

Money paid up-front to obtain a lower interest rate.

Each point is equal to 1% of the mortgage amount. Points are used by the lender to adjust the yield on the mortgage when it is sold to an investor. By paying more points, the borrower can obtain a lower mortgage interest rate.

Additional charges made by a lender at the time a loan is made. Points are measured as a percent of the loan, with each point equal to one percent.

Money paid to a lender at closing in exchange for lower interest rates. Each point is equal to 1% of the loan amount.

Fees that are collected by the lender in exchange for a lower interest rate. Each discount point is 1% of the loan amount. For our comparison purposes, a discount point is considered to be a lender fee. To determine if it is wise to pay discount points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate. Sometimes referred to as "points".

Charges levied by the mortgage lender to obtain a better interest rate, usually payable at closing. One point represents 1% of the mortgage loan amount.

Money paid to the lender in order to receive a lower loan rate.

Additional points you can pay a lender to lower the interest rate on your loan at closing. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000). Also referred to as Points.

fees that a borrower pays to lower the interest rate on a loan. Each point is equal to one percent of the loan amount.

The fee associated with the note rate for your loan, the more discount points you pay the lower the rate you can buy, the fewer you pay, the higher your rate. If the rate is high enough, the loan is priced above par and these premium points are available to pay closing costs creating a no or low fee loan.

Amounts paid to the lender at loan origination that lower the interest rate on the face of the note.

Discount points refer to the "points" paid in addition to the one percent loan origination fee. Points may be paid by either the buyer or seller. This does not usually apply to government-secured loans, such as FHA and VA.

Charges levied by the mortgage lender and usually payable at closing. One point represents 1% of the face value of the mortgage loan.

Any amount paid to the lender when a loan is originated to account for the difference between the current market-determined cost of interest and the actual lower interest rate of the loan. In most cases each point is equal to one percent of the original loan amount. Points may be paid by either the buyer or seller.

Interest points charged by and payable to the lender to increase the loan's effective yield. One point is equal to 1% of the loan amount.

Also known as Points; it is prepaid interest demanded by the lender when a loan is negotiated at a stated rate. Discount points cost one percent of the face amount of the loan. Example: $100,000 loan = $1,000 of discount points.

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