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Loan Origination Fees Vs Discount Points

When taking out a mortgage, you probably were considering buying discount points whether for a new purchase or to refinance an existing loan, one decision you’ll undoubtedly will have, is to   make sure it’s worth paying discount points to obtain a certain interest rate on your mortgage.

Before going any further, it’s important to note that the term “points” gets thrown around loosely, and can refer to the loan origination fee and/or discount points. The loan origination fee is the commission charged by the bank or the loan officer for working on your loan, where on the other hand discount points are used to buy down your interest rate.

It’s an important distinction because the loan origination fee pays for the costs of originating the mortgage and these fees involves:

  • Paperwork
  • Verification’s
  • Calculations done to determine your mortgage rate

Finally, it is important to know that a good credit score may help you get a lower origination fee, and an excellent credit score can be an even better bargaining tool in your negotiations.

While paying discount points (prepaid interest) is entirely optional depending on the rate you desire. Discount points are a one-time, upfront mortgage closing cost which give a mortgage borrower access to “discounted” mortgage rates as compared to the market.  

We at Home Loans On Demand are devoted to your real estate financing needs as we partner to assure you receive only the best home-loan solution specifically suited to your financing and lifestyle needs

FHA, Home Loans, Loans, Mortgage, Rates, Refinance

What Are Today’s Mortgage Rates?

Today’s mortgage rates are probably lower than they’ll be at the end of 2017, per most experts.   However, your actual mortgage quotes depend on several factors — like your credit rating, loan amount, and how you intend to use the property.   Advertised rates can’t consider these factors and are not as accurate as custom quotes that you get by contacting mortgage lenders.

Whether you are purchasing your dream home, refinancing an outstanding loan, or consolidating debt, our highly-experienced team can help you find the right loan program.  

Call us today @ 714-493-2657