Mortgage points can be a confusing topic.
Some people say you should pay for them. Some say you shouldn't. Some people don't even really know what they are. So, to clear up the confusion, we went to an expert. Mortgage Specialist Jason Hellman from Dundee Banking spoke with us recently about the Great Points Debate. His answers are fantastic and informative. Enjoy!
When talking about mortgages, what does the word “points” mean?
“Points” is mortgage industry jargon for pre-paid interest charged as a fee at closing. Historically, “one point” was charged by lenders to close a loan. One point is one percent of the loan amount. This practice has changed over time. In most markets, the norm has transitioned from one-point to no-points as a…