Points are up-front fees paid to obtain a better interest rate on a loan. One point equals one percent of the loan amount. A lower interest rate may result in a lower monthly payment, but it is important to consider how long you intend to be in the loan, and to compare current rates to historical market trends. |
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Mortgage Interest Rates* | ||||||||||||||||||||||||||||||||||||||||||||||||||
Rates as of Monday, 1st December, 2008: | ||||||||||||||||||||||||||||||||||||||||||||||||||
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*Rates are subject to change due to market fluctuations and borrower's eligibility. | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Sometimes we forget to explain the difference between Origination Points and Discount Points, do clients understand the difference. Do Mortgage companies use origination points still?
I don't think most clients understand the difference without a good explanation. Origination Points are definitely still used. To add confusion, I've seen what is really an Origination Point called a Discount Point and vice versa. Maybe not all originators understand the difference either...
Nice post Karl! I agree that most people do not understand points, the difference between dicount points and origination fees, and for that matter whether they are being charged points by the lender or not. This is where a little education goes a long way in helping our clients make a good financial decision and end up with the right loan for them.
Thanks Brian. We definitely seem to share the same beliefs in our responsibilities to our customers. Education is such a vital part of what we need to do.
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