What Are Points, Anyway?

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Real Estate

What Are Points, Anyway?

Knowing how to leverage your home mortgage can go a long way in saving money and obtaining the best terms and rates possible.

A quick quiz: mortgage “points” are

a) certain charges paid to obtain a home mortgage

b) the gross profit for the originator of the loan

c) up-front mortgage interest fees to reduce the interest rate

d) each equal to 1 percent of the total loan amount

e) loan origination fees

f) charged by a lender to raise the yield on a loan when money is tight, interest rates are high, or there is a legal limit on the interest rate that can be charged on a mortgage

g) come in two varieties

h) all of the above

 

Answer: h.