Tag: Points

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ARE YOU BEING CHARGED AN ORIGINATION FEE OR POINTS ON A LOAN?

You may hear people talking about “points” or charging a “point” on a loan; what does this mean? A point typically represents the origination fee charged by the lender to originate the loan; One point is 1% of the loan amount. Example: If you are applying for a $200,000 loan, a point would be $2,000,...

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BUYDOWN AS AN EXAMPLE

As interest rates fluctuate, you may see lenders offering mortgages with buydowns. This is a different type of mortgage than if you buy down the rate. I’ll explain: If you buy down the rate, you are paying extra money, usually points, to get a lower rate. The rate you buy down becomes the rate for...

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BUYING DOWN RATES

Let’s say you are looking to buy a $350,000 home with 20% down for a loan amount of $280,000. You want a 30-year fixed mortgage, and assume the rate is 4.25%; the principal and interest payment would be $1,377.43. If you paid a point, assume the rate would be 3.875% and the payment is $1,316.66....

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LOW INTEREST RATES SPUR MORE REFINANCING ACTIVITY

  Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. Even more favorable rates have unleashed a fresh wave of refinancing activity during H2-19. Borrowers have been enjoying a low interest rate environment for some time. Yet the Fed’s last 3 rate cuts in H2-19 have stoked a surge...