# points - Posted by bryan howard

Posted by Stacy (AZ) on October 12, 1999 at 17:48:04:

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points - Posted by bryan howard

Posted by bryan howard on October 12, 1999 at 16:07:52:

I hope there are no dumb questions…I hear of people getting hit with points. Sometimes getting charges 1 or 2 points. WHAT ARE POINTS?? How can they hurt or help you?

points are paycheck - Posted by LenWa

Posted by LenWa on October 12, 1999 at 20:24:07:

More info on points its also the paycheck for the mortgage broker say—he sumits a loan pack to the Lender they deside to fund on this loan. Lenders points might be 1 1/2 points the broker adds on another 1 1/2 points. Thats his cut (paycheck) for this deal
for a total of 3 points on this loan.

Re: points - Posted by Ed Garcia

Posted by Ed Garcia on October 12, 1999 at 18:49:18:

Bryan Howard:

One of my favorite places is the on this site is the How -To Articles.
After going there, find the . (Glossary Of Common Terms Used In Loans
And Lending) By Ed Wachsman

Here is the definition of Points taken from there.

Discount Points. One point equals one percent of the loan amount. Paying
points has the effect of giving the lender a higher yield. Two points on a
\$100,000 mortgage would cost \$2,000 (\$100,000 x 0.02).

The reason I did this was not just for you Bryan, but for others who are
requesting information to know where to find it immediately.

Further explanation.

The only difference between 10% interest and 10 points is time.

If you charged a customer 10% and 10 points for one year, they would
be one in the same, and you would have charged the customer 20% .
Once you ad time, the interest rate is calculated for that period of time.

Points are a one time fee.

Ed Garcia

Re: points - Posted by NJDave

Posted by NJDave on October 12, 1999 at 17:35:18:

In your scenario, a ‘point’ is an additional cost to borrow money, irrespective of the interest rate charged. One point equals one percent of the amount you want to borrow.

One point on a \$100,000 loan would be \$1,000. 3 points would equal \$3,000.

1 pt = \$1K - Posted by RRSmith

Posted by RRSmith on October 12, 1999 at 17:17:55:

Points are what a mortgage maker quotes behind the interest rate as a cost of business, for example a NIV
(no income Verification) loan at
9.5% with 1 & 1
8.25% with 1 & 0 FHA 3% down 30 year
the two numbers after the percentage are the points that YOU will have to pay (in addition to other closing costs).

one percent of the mortgage - Posted by RRSmith

Posted by RRSmith on October 12, 1999 at 18:09:12:

On a \$150,000 duplex one point would be
1% of \$150K or \$1500 per point, my mistake I stand corrected.