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How the points work?When we buy points in a loan how much cost?

What is the price of the points how are these calculated?

If the interest rate raise the points get more expensive?

Can a loan agent manage to change the price of these points?
  • August 22 2009 - Stockton Metropolitan Airport
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Answers (2)

Hello mjiweyfe,
A point is basically a percentage of the loan amount.  So, if the lender is charging 1 point, this would be 1% of the loan amount. 2points = 2%. Ex... On a $150,000 loan 1 point would = $1,500.

If the interest rates go up, the amount of points should not.  In fact, the opposite could be true.  The higher the rate the less points you should have to pay.

Yes, loan officers/agents can change the points.  You should know that rates change daily, thus the cost (points) also can change on any given day. Also, different lenders will chage different amount of points to get the same rate.  Thats why it is important to get a couple quotes.
Hope this helps,

David
mckeeverrealestate.com

  • September 29 2009
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Ask this question in the "Mortgage" section if you want an answer.  As far as I know, there are no simple answers to these questions as it varies by loan officer and lender.
  • August 27 2009
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