HELP! | Discount
(if Borrower will pay): |
Discount
(if Borrower will pay): |
Discount
really means "Discount Points". One point is equal to 1% of the total
loan amount. For example, one point on a $140,000.00 loan would be
$1,400.00 - three points would be $4,200.00, and so on. Discount
points are points charged by the lender for reducing the interest rate
on your loan - also known as "buying down the loan".
Discount points started with FHA and VA loans and has become increasingly popular (and quite common) in conventional loans. It's a great way to save a lot of money in interest on your loan if you're planning on owning your property for a few years. This, of course, depends on how low you can buy down your loan's interest rate for the money the lender will charge. If you know that you
will be paying discount points and know how much this will cost, enter
the amount in the field provided.
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